Impact of Subsidy Schemes on the Economic Well-Being of Households in Vietnam

Abstract

This paper uses the Propensity Score Matching method (PSM) to determine the criteria of eligibility for production and income subsidies and the Difference-in-Difference method (DID) to evaluate the impact of these policies on households’ economic well-being in Vietnam. The empirical results indicate that though these policies have not contributed to a clear economic well-being improvement of the participating households, their impacts tend to move in a positive direction. It should be noted that though these policies do not make the income/expenditure of the participating households increase, they help increase the income component from agricultural production significantly, especially for the group receiving production subsidies, and at the same time increase spending on durable goods and health care services in comparison with nonparticipating households.