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Expenditure Growth in Laos Between 1997 and 2008 : Is It Due to the Improvement of Social Factors or their Returns?

Author

Listed:
  • Keisuke Kawata

    (Graduate School for International Development and Cooperation, Hiroshima University)

  • Leksay Keoyasan

    (Graduate School for International Development and Cooperation, Hiroshima University)

  • Yuichiro Yoshida

    (Graduate School for International Development and Cooperation, Hiroshima University)

Abstract

This paper quantitatively examines evidences on expenditure growth in Laos between 1997 and 2008 using the 1997 and 2008 Lao Expenditure and Consumption Survey data (LECS2 and LECS4). Results show that real per-capita expenditure of Lao PDR has increased by 802% during the period. Disaggregating into two groups we find that rural households have slightly higher real per-capita-expenditure growth rate than those of urban household with the rates being 832% and 777% respectively. Estimation of per-capita expenditure regressions for each of these two time points consistently show that education and village endowments have positive impact on per-capita expenditure. We then conduct decomposition a-la Neumark (1988) to find that vast majority of improvement is due to the growth in returns to social factors, not the growth in social factors themselves.

Suggested Citation

  • Keisuke Kawata & Leksay Keoyasan & Yuichiro Yoshida, 2014. "Expenditure Growth in Laos Between 1997 and 2008 : Is It Due to the Improvement of Social Factors or their Returns?," IDEC DP2 Series 4-5, Hiroshima University, Graduate School for International Development and Cooperation (IDEC).
    • Handle: RePEc:hir:idecdp:4-5
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    References listed on IDEAS

    as
    1. World Bank, 2008. "Community-Driven Approaches in Lao PDR : Moving Beyond Service Delivery - Summary Overview," World Bank Publications - Reports 6163, The World Bank Group.
    2. Angus Deaton & Christina Paxson, 1998. "Economies of Scale, Household Size, and the Demand for Food," Journal of Political Economy, University of Chicago Press, vol. 106(5), pages 897-930, October.
    3. Andersson, Magnus & Engvall, Anders & Kokko, Ari, 2006. "Determinants Of Poverty In Lao Pdr," EIJS Working Paper Series 223, Stockholm School of Economics, The European Institute of Japanese Studies.
    4. Lanjouw, Peter & Ravallion, Martin, 1995. "Poverty and Household Size," Economic Journal, Royal Economic Society, vol. 105(433), pages 1415-1434, November.
    5. Robert Eastwood & Michael Lipton, 1999. "The impact of changes in human fertility on poverty," Journal of Development Studies, Taylor & Francis Journals, vol. 36(1), pages 1-30.
    6. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
    7. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    8. World Bank, 2008. "Community-Driven Approaches in Lao PDR : Moving Beyond Service Delivery, Volume 2. Main Report," World Bank Publications - Reports 7973, The World Bank Group.
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    Keywords

    Laos; Development; Expenditure; Neumark decomposition;
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