Exploring Differences in Rural Household Debt Between Thailand and Vietnam: Economic Environment versus Household Characteristics

30th International Conference of Agricultural Economists, July 28th - August 2nd, 2018

27 Pages Posted: 2 Jan 2019

Date Written: 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.

JEL Classification: D91, D31

Suggested Citation

Waibel, Hermann and Chichaibelu, Bezawit Beyene, Exploring Differences in Rural Household Debt Between Thailand and Vietnam: Economic Environment versus Household Characteristics (2018). 30th International Conference of Agricultural Economists, July 28th - August 2nd, 2018, Available at SSRN: https://ssrn.com/abstract=3301161 or http://dx.doi.org/10.2139/ssrn.3301161

Hermann Waibel

Leibniz Universität Hannover ( email )

Welfengarten 1
D-30167 Hannover, 30167
Germany

Bezawit Beyene Chichaibelu (Contact Author)

IFAD ( email )

Via Paolo di Dono
Rome, 00142
Italy

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
12
Abstract Views
215
PlumX Metrics