A quantile regression decomposition of urban–rural inequality in Vietnam

Abstract

We use the Vietnam Living Standards Surveys from 1993 and 1998 to examine inequality in welfare between urban and rural areas in Vietnam. Real per capita household consumption expenditure (RPCE) is our measure of welfare. We apply a quantile regression decomposition technique to analyze the difference between the urban and rural distributions of log RPCE. In the earlier survey, the urban-rural gap is primarily due to differences in covariates such as education, ethnicity, and age. This is true across the entire distribution. In the later survey, this is true only for lowest quantiles. For the rest of the distribution, the gap is primarily due to differences in returns to covariates between the urban and rural sectors.

Regional Growth and Regional Decline

“…Acemoglu and Dell (2010) show that approximately half of the withincountry, between-region inequality in labour income in the Americas (Canada, U.S. and Latin America) can be accounted for by differences in workers' education and experience. Another branch of the literature uses household-level data to account for regional differences in household composition, and to estimate how the returns to characteristics vary across locations; relevant studies include Nguyen et al (2007) for Vietnam and Skoufias and Katayama (2011) for Brazil. Nguyen et al find that, in their data for 1993, the urban-rural gap in household consumption per capita is primarily due to differences in covariates such as education, ethnicity, and age, and this is true throughout the distribution.…”

Alternative measures of homeownership gaps across segregated neighborhoods

“…As noted above, applications of the Machado-Mata technique include studies that explain wage (Albrecht et al 2003, andArulampalam et al 2007), income (Nguyen et al 2007) and housing price (McMillen 2007) differentials. The method generates a counterfactual distribution, for example, the distribution of homeownership rates in white neighborhoods if they had the observed characteristics of non-white areas, and compares it with the actual distribution, that is, with the observed distribution of homeownership rates in non-white areas.…”

“…The fraction owner-occupants is continuous and confining 6 Applications of the Machado-Mata technique include studies that explain wage (Albrecht et al 2003, andArulampalam et al 2007), income (Nguyen et al 2007) and housing price (McMillen 2007) differentials. 7 The male-female wage gap is relatively uniform for the U.S. but, for some European countries such as Sweden, it is negligible at the lower end and very large at the upper end of the wage distribution giving rise to what has been termed the "glass ceiling" effect on the most skilled women.…”

Growing Richer and Taller: Explaining Change in the Distribution of Child Nutritional Status During Vietnam's Economic Boom

“…a height-for-age z-score less than -2. 3 See (Nguyen et al 2006) for an application of this decomposition technique to urban-rural inequality. 4 Moving from a situation in which oral rehydration salts are never available to one in which they are always available is associated with a 0.44 point rise in the height-for-age z-score, which is close to the actual change in the mean score in rural areas.…”