Does Urbanization Help Poverty Reduction in Rural Areas?Evidence from a Developing Country

Cuong Nguyen

MPRA Paper from University Library of Munich, Germany

Abstract: Urbanization and poverty have a two-way relationship. Using fixed-effects regression and panel data from household surveys, we estimate the effect of urbanization on income and consumption expenditure of rural households in Vietnam. Then we propose a simple estimate method to estimate the effect of urbanization on rural poverty. It is found that a one percent increase in urbanization leads to a 0.54 percent increase in per capita income and a 0.39 percent increase in per capita expenditure of rural households. In addition, a one percentage point increase in urbanization helps rural households decrease the poverty rate by 0.17 percentage point. However, we find an effect of urbanization on consumption of unhealthy goods: urbanization increases household expenditures on tobacco and wine.

Keywords: Urbanization; household welfare; poverty; impact evaluation; household surveys; Vietnam; Asia. (search for similar items in EconPapers)
JEL-codes: I30 O18 R11 (search for similar items in EconPapers)
Date: 2012-06-20
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Citations: View citations in EconPapers (6)

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