EFFECTS OF LIVELIHOOD DIVERSITY ON RURAL HOUSEHOLD'S INCOME IN VIETNAM: A COMPOSITIONAL DATA ANALYSIS APPROACH

Abstract

This research analyzes the current status and the impact of livelihood diversity on the Vietnamese rural households' income based on the 2020 Vietnam Household Living Standard Survey. The compositional data analysis (Coda) approach was used. Research results show that non-farm income has the highest proportion in all six socio-economic regions. Besides, the compositional data analysis regression model reveals that a 1% increase in non-farm wage income (resp., non-farm-services income) increased total household income by 0.011% (resp., 0.023%). In addition, household income was affected by household head characteristics, such as: age, marital status, ethnicity, and education level, and the number of household members, the rate of dependent members. Environmental factors, such as using clean water and standard toilets, agricultural land, and living regions, significantly impact household income. In the current context of urbanization and agricultural transformation, the increasing diversification of livelihoods is an essential goal in developing household income, contributing to the realization of macroeconomic objectives.