Abstract:

Using a panel data from the Viet Nam Household Living Standard Surveys (VHLSS) from 2006 and in 2008, the study examines the impact of the increase in food prices on welfare and poverty in different regions of Viet Nam. We find that, on average, the rise in food prices increased the welfare of households in Viet Nam by 7.5% which is mainly due to higher rice prices. The percentage of households who gained from the increase in food prices is much smaller than of those who lost. Winners are mostly households in the second and third income quintile. The absolute number of people living in poverty increased and the poverty gap deepened with large variation among the regions in Vietnam. Our paper supports the findings of similar research that supply reaction of producers is moderate. On the demand side, only poor consumers show a strong reaction. Price changes vary among the different food commodities and types of households. In this paper, we also take into account the increase in cost of production, which contributes to the impact on the welfare and poverty in different regions.