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Diversification, risk management and risk coping strategies: Evidence from rural households in three provinces in Vietnam

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  • Phung Duc, Tung
  • Waibel, Hermann

Abstract

The paper analyzes the relationship between the allocation of labor and land, the number of crops grown and income sources of rural households in Vietnam and different types of shocks and risks. It uses the data from the first phase of the household survey in three provinces of Central of Vietnam, conducted within the scope of the DFG research project "Impact of shocks on the vulnerability to poverty: consequences for development of emerging Southeast Asian economies". The results suggest that the households diversify their portfolio (labor and land) into different income generating activities in order to cope with shocks. Among the different types of shocks and risks, agriculture and economic shocks and risks are the main factors to explain the (ex-post) risk-coping strategies and the (ex-ante) risk management of the households. The number of crops grown and the number of income sources from the households experienced with shocks are higher than others. In addition, the high-risk expectation households diversify their labor and land more than the low risk expectation households. The access to credit and market, the number of household labor, the education of the household head, and the wealth of the household are also very important factors that impact on the diversification level of the households.

Suggested Citation

  • Phung Duc, Tung & Waibel, Hermann, 2009. "Diversification, risk management and risk coping strategies: Evidence from rural households in three provinces in Vietnam," Proceedings of the German Development Economics Conference, Frankfurt a.M. 2009 25, Verein für Socialpolitik, Research Committee Development Economics.
    • Handle: RePEc:zbw:gdec09:25
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    References listed on IDEAS

    as
    1. Minot, Nicholas & Epprecht, Michael & Anh, Tran Thi Tram & Trung, Le Quang, 2006. "Income diversification and poverty in the Northern Uplands of Vietnam:," Research reports 145, International Food Policy Research Institute (IFPRI).
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    3. Skoufias, Emmanuel, 2003. "Economic Crises and Natural Disasters: Coping Strategies and Policy Implications," World Development, Elsevier, vol. 31(7), pages 1087-1102, July.
    4. Culas, Richard J. & Mahendrarajah, Mahen, 2005. "Causes of Diversification in Agriculture Over Time: Evidence From Norwegian Farming Sector," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24647, European Association of Agricultural Economists.
    5. Harold Alderman & Christina H. Paxson, 1994. "Do the Poor Insure? A Synthesis of the Literature on Risk and Consumption in Developing Countries," International Economic Association Series, in: Edmar L. Bacha (ed.), Economics in a Changing World, chapter 3, pages 48-78, Palgrave Macmillan.
    6. Dominique Van De Walle & Dorothyjean Cratty, 2004. "Is the emerging non‐farm market economy the route out of poverty in Vietnam?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 12(2), pages 237-274, June.
    7. Stefan Dercon (QEH), "undated". "Vulnerability: a micro perspective," QEH Working Papers qehwps149, Queen Elizabeth House, University of Oxford.
    8. Ersado, Lire, 2006. "Income diversification in Zimbabwe : welfare implications from urban and rural areas," Policy Research Working Paper Series 3964, The World Bank.
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    Cited by:

    1. Grote, Ulrike & Waibel, Hermann, 2017. "Rural-Urban Migration, Welfare and Employment : Comparing Results from Thailand and Vietnam," 2017 ASAE 9th International Conference, January 11-13, Bangkok, Thailand 284809, Asian Society of Agricultural Economists (ASAE).
    2. Nguyen, Duc Loc & Grote, Ulrike, 2015. "Migration, Agricultural Production and Diversification: A case study from Vietnam," 2015 Conference, August 9-14, 2015, Milan, Italy 229379, International Association of Agricultural Economists.
    3. Nguyen, Loc Duc & Raabe, Katharina & Grote, Ulrike, 2015. "Rural–Urban Migration, Household Vulnerability, and Welfare in Vietnam," World Development, Elsevier, vol. 71(C), pages 79-93.

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    More about this item

    Keywords

    Diversification; risk management; risk coping strategies; Vietnam;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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