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Title
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Understanding the saving rate difference between urban and rural households in Vietnam
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Author
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Abstract
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| Like other countries, households in urban areas could attain higher saving rate than those in rural areas in Vietnam. Since high saving rate could raise high economic growth through investment, it would also influence to inequality between urban and rural sector. Yet, the household saving rate disparity between urban and rural areas have not investigated before. We expect to reveal this gap by analyzing the household saving rate difference between urban and rural sectors at the means and at the unconditional quantiles. To aim this objective, we apply Oaxaca-Blinder decomposition method on the results of OLS and unconditional quantile regressions to divide these differences into two components: the endowment effect and the return effect. First of all, we find that the urban - rural saving rate gap between urban and rural households decreases monotonically from the low to high quantiles of distribution. Additionally, at the low quantiles, the component of endowment effect plays important role in explaining the saving rate gap between urban and rural. Nevertheless, at the high quantiles, the component of return effect has a crucial impact in decreasing the gap. Analyzing on the detailed decomposition, we find that household income is the most important factor for both the endowment and return effect. As a result of this study, we think that policies related to household income could be applied in order to control saving difference between two areas. |
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Language
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English
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Source (book)
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Proceedings of International Conference on Business and Finance 2019, August 23, 2019, Ho Chi Minh City, Vietnam
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Publication
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Vietnam
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University of Economics, Ho Chi Minh City
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2019
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ISBN
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978-604-922-764-6
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Volume/pages
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p. 254-288
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