Essays on Farm Household Decision-Making: Evidence from Vietnam

Dissertation, University of Trento (2013)
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Abstract

This thesis contains three studies which provide theoretical analysis and empirical evidence on the decision-making of farm households under shocks and imperfect markets in Vietnam. The first study attempts to investigate the effects of the 2007-08 global food crisis on the investment, saving and consumption decisions of household producers by using the panel data of the Vietnam Household Living Standard Survey (VHLSS), covering 2006 and 2008. The results show that the high food prices had a positive effect on only fixed asset investments in the period of the crisis. When the price shocks are incorporated in the financial conditions, the findings reveal that the effects of household incomes, loans obtained and land sizes matter. The second study uses the Vietnam Access to Resources Household Survey (VARHS) of 2010 to assess the determinants of chemical fertiliser adoption for rice cultivation, and effects on productivity and household welfare. The analysis implements both nonparametric (propensity score matching) and parametric (instrumental variables) approaches. The findings show determinants affecting decision of adoption differ from those affecting decision of adoption intensity. The results show unsurprisingly positive impact on outcomes, but focus on advantage of using parametric approach to estimate these impacts. The third study employs a sub-sample from the 2008 VHLSS that is restricted to rural areas and to children from 10 to 14 years old to explore the relationship between farmland and the employment of children on their family’s farm. The hypothesis is tested in three models (the Tobit, Heckit and double-hurdle models), in which the dependent variables are examined for two stages of decision-making, including the probability of participation and the extent of participation. Empirical evidence supports the hypothesis that child labour increases in land-rich households and decreases in land-poor households.

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