Exploring Differences in Rural Household Debt between Thailand and Vietnam: Economic Environment versus Household Characteristics.
19/11/18 04:02PM
H. Waibel and B.B. Chichaibelu. July 28-August 2 2018 Conference, 2018, Vancouver, British Columbia 277520, International Association of Agricultural Economists, 2018.
Abstract: This study aims
to explore cross-country differences in credit market participation,
level of household debt holding and over-indebtedness
between rural households in Thailand and Vietnam. Using a unique rural
household survey data from Vulnerability in Southeast Asia project, it
first identifies socio-economic determinants of such market outcomes for
rural households in Thailand and Vietnam.
It decomposes differences into a part that arise due to configuration
of household characteristics or a part that arise due to differences in
economic environments using three decomposition methods. Significant
differences are observed in credit market participation
rates and level of debt holding and indebtedness between rural
households in Thailand and Vietnam. Rural households in Thailand tend to
participate more in the credit market and face higher risk of
over-indebtedness. These observed differences arise mainly
due to dissimilarity in the economic environment for households with
similar characteristics. Economically disadvantaged rural households in
Thailand are more likely to participate in the credit market and face
higher level of indebtedness mainly because credit
markets are make borrowing easy. The higher gap observed in the upper
part of the debt distribution between Thailand and Vietnam can be
explained by differences in credit market conditions between the two
countries.
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