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Does Economic Inequality Affect the Quality of Life of Older People in Rural Vietnam?

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Abstract

By combining data from the 2011 Vietnam National Aging Survey and the 2011 Rural, Agricultural and Fishery Census, this study examined whether expenditure inequality has any effect on the quality of life (life satisfaction or happiness) among the elderly in rural Vietnam. It was confirmed from our regression analysis that individuals who live in the communes with high inequality tend to self-report as being less happy, even after controlling for various individual and household attributes. The findings are robust to the choice of inequality measures and the specification of econometric models. We also find that older rural people who are farmers or poor are more sensitive to inequality. Given that these people tend to be less happy than others, the result shows the risk that inequality further lowers their subjective well-being. This finding, in part, supports the view that rural Vietnam is not a mobile society.

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Notes

  1. This is because happiness is a crucial component of quality of life (Sumngern et al. 2010).

  2. In Vietnam, different poverty and inequality maps are constructed using the small area estimation method (e.g., recent studies are Nguyen 2011; Lanjouw et al. 2013).

  3. Another possible explanation, is similar to that used by Gray et al. (2008), is that while many Vietnamese old people in rural areas do not live with their children or grandchildren, their home close to their children/grandchildren’s home. Furthermore, although the elderly do not co-reside with their children/grandchildren, their children/grandchildren still contribute positively to their material well-being and still maintain contact and visits.

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Authors and Affiliations

  1. University of Economics and Business, Vietnam National University, Room 100, Building E4, No. 144, Xuan Thuy Street, Cau Giay District, Hanoi, Vietnam

    Tuyen Quang Tran

  2. Institute of Public Policy and Management, National Economics University, Hanoi, Vietnam

    Cuong Viet Nguyen

  3. Department of Economics, Academy of Finance, Hanoi, Vietnam

    Huong Van Vu

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  1. Tuyen Quang Tran
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  2. Cuong Viet Nguyen
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  3. Huong Van Vu
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Correspondence to Tuyen Quang Tran.

Appendices

Appendix 1

The Gini index can be calculated from the individual expenditure in the population (Deaton 1997):

$$G = \frac{n + 1}{n - 1} - \frac{2}{{n\left( {n - 1} \right)\bar{Y}}}\sum\limits_{i = 1}^{n} {\rho_{i} y_{i} } ,$$
(4)

where ρ i is the rank of person i in the Y-distribution, counting from the richest so that the richest has the rank of 1. The value of the Gini coefficient varies from 0 when everyone has the same expenditure to 1 when one person has everything. The closer a Gini coefficient is to one, the more unequal is the expenditure distribution.

The Theil L index of inequality, which is also known as Generalized entropy index GE(0), is calculated as follows:

$$Theil\_L = \frac{1}{n}\sum\limits_{i = 1}^{n} {\ln \left( {\frac{{\bar{Y}}}{{Y_{i} }}} \right),}$$
(5)

The Theil L index ranges from 0 to infinity. A higher value of Theil L indicates more inequality.

The Theil T index of inequality, which is also known as Generalized entropy index GE(1), is calculated as:

$$Theil\_T = \frac{1}{n}\sum\limits_{i = 1}^{n} {\frac{{Y_{i} }}{{\bar{Y}}}\ln \left( {\frac{{Y_{i} }}{{\bar{Y}}}} \right)}$$
(6)

The Theil T index ranges from 0 (lowest inequality) to ln(N) (highest inequality).

Appendix 2

See Table 6.

Table 6 Factors associated with happiness (Ordered Logit Models)
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Tran, T.Q., Nguyen, C.V. & Van Vu, H. Does Economic Inequality Affect the Quality of Life of Older People in Rural Vietnam?. J Happiness Stud 19, 781–799 (2018). https://doi.org/10.1007/s10902-017-9851-4

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