Details
| Original language | English |
|---|---|
| Pages (from-to) | 353-388 |
| Number of pages | 36 |
| Journal | Social indicators research |
| Volume | 168 |
| Issue number | 1-3 |
| Early online date | 26 May 2023 |
| Publication status | Published - Aug 2023 |
Abstract
Understanding households’ resilience-building strategies is vital for the domains of humanitarian assistance, economic development, and poverty reduction, especially in the places where are vulnerable to shocks. In this study, we offer the first trial that takes into account the correlation between households’ risk attitude and their resilience-building strategies, namely savings as an absorptive capacity and income diversification as an adaptive capacity. We examine the effects of these resilience strategies on reducing the impacts of shocks and poverty. We use a panel data of 1227 identical households for Vietnam in two waves of the Thailand–Vietnam Socio-Economic Panel project to investigate the above issues. We address the endogenous problems of households’ risk attitude, savings, and income diversification. Our results show that more risk-averse households tend to save more and diversify their income portfolios. These precautionary strategies to build up their resilience capacity help prevent them from reducing consumption caused by shocks and from falling into poverty in absolute, relative, and multidimensional measures. We suggest that rural development policies in developing countries should focus on facilitating more income generation and employment opportunities. Furthermore, the development of rural education and infrastructure for information and communication technology should be taken into account of designing poverty reduction programs.
Keywords
- Absorptive capacity, Adaptive capacity, Instrumental variables, Panel data
ASJC Scopus subject areas
- Psychology(all)
- Developmental and Educational Psychology
- Arts and Humanities(all)
- Arts and Humanities (miscellaneous)
- Social Sciences(all)
- Sociology and Political Science
- Social Sciences(all)
- General Social Sciences
Sustainable Development Goals
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In: Social indicators research, Vol. 168, No. 1-3, 08.2023, p. 353-388.
Research output: Contribution to journal › Article › Research › peer review
}
TY - JOUR
T1 - The Role of Savings and Income Diversification in Households’ Resilience Strategies
T2 - Evidence from Rural Vietnam
AU - Do, Manh Hung
N1 - Funding Information: The author would like to thank the respondents from the surveyed provinces for their friendly support and collaboration. Besides, I highly acknowledge the financial support of the German Research Foundation (DFG—FOR 756/2) for the TVSEP project and the effort of our colleagues at the Leibniz University Hannover for data collection and cleaning. I would also like to thank the German Academic Exchange Service (DAAD) for financial assistance. Valuable comments and suggestions from Prof. Ulrike Grote and PD Dr. Trung Thanh Nguyen are gratefully acknowledged. I greatly acknowledge the constructive comments and suggestions from the Editor and two anonymous reviewers.
PY - 2023/8
Y1 - 2023/8
N2 - Understanding households’ resilience-building strategies is vital for the domains of humanitarian assistance, economic development, and poverty reduction, especially in the places where are vulnerable to shocks. In this study, we offer the first trial that takes into account the correlation between households’ risk attitude and their resilience-building strategies, namely savings as an absorptive capacity and income diversification as an adaptive capacity. We examine the effects of these resilience strategies on reducing the impacts of shocks and poverty. We use a panel data of 1227 identical households for Vietnam in two waves of the Thailand–Vietnam Socio-Economic Panel project to investigate the above issues. We address the endogenous problems of households’ risk attitude, savings, and income diversification. Our results show that more risk-averse households tend to save more and diversify their income portfolios. These precautionary strategies to build up their resilience capacity help prevent them from reducing consumption caused by shocks and from falling into poverty in absolute, relative, and multidimensional measures. We suggest that rural development policies in developing countries should focus on facilitating more income generation and employment opportunities. Furthermore, the development of rural education and infrastructure for information and communication technology should be taken into account of designing poverty reduction programs.
AB - Understanding households’ resilience-building strategies is vital for the domains of humanitarian assistance, economic development, and poverty reduction, especially in the places where are vulnerable to shocks. In this study, we offer the first trial that takes into account the correlation between households’ risk attitude and their resilience-building strategies, namely savings as an absorptive capacity and income diversification as an adaptive capacity. We examine the effects of these resilience strategies on reducing the impacts of shocks and poverty. We use a panel data of 1227 identical households for Vietnam in two waves of the Thailand–Vietnam Socio-Economic Panel project to investigate the above issues. We address the endogenous problems of households’ risk attitude, savings, and income diversification. Our results show that more risk-averse households tend to save more and diversify their income portfolios. These precautionary strategies to build up their resilience capacity help prevent them from reducing consumption caused by shocks and from falling into poverty in absolute, relative, and multidimensional measures. We suggest that rural development policies in developing countries should focus on facilitating more income generation and employment opportunities. Furthermore, the development of rural education and infrastructure for information and communication technology should be taken into account of designing poverty reduction programs.
KW - Absorptive capacity
KW - Adaptive capacity
KW - Instrumental variables
KW - Panel data
UR - http://www.scopus.com/inward/record.url?scp=85160331857&partnerID=8YFLogxK
U2 - 10.1007/s11205-023-03141-6
DO - 10.1007/s11205-023-03141-6
M3 - Article
AN - SCOPUS:85160331857
VL - 168
SP - 353
EP - 388
JO - Social indicators research
JF - Social indicators research
SN - 0303-8300
IS - 1-3
ER -