Demand Analysis of Multiple Goods and Services in Vietnam
In 1986 the Đổi Mới reform changed the economic and social policies in Vietnam, triggering steep economic growth and the shift from a low- to a middle-income economy. In parallel to the economic growth, Vietnam also experienced rapid social and dem...
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| Language: | English |
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World Bank, Washington, DC
2021
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| Online Access: | http://documents.worldbank.org/curated/undefined/640571634048710919/Demand-Analysis-of-Multiple-Goods-and-Services-in-Vietnam http://hdl.handle.net/10986/36389 |
| Summary: | In 1986 the Đổi Mới reform changed
the economic and social policies in Vietnam, triggering
steep economic growth and the shift from a low- to a
middle-income economy. In parallel to the economic growth,
Vietnam also experienced rapid social and demographic
change, which resulted in modified consumption behavior.
This paper estimates a Quadratic Almost Ideal Demand System,
obtaining income and own- and cross-price elasticities for
10 groups of goods and services that can contribute to the
further economic development of Vietnam. To control for
potential bias generated by unobserved quality substitution
and endogenous unit values, the analysis adopts an
instrumental variable method. The results show that
household equipment, clothing and accessories,
telecommunication, transport, and medical and health
services are responsive to income changes, while food,
foodstuffs, beverages and tobacco, education, and
electricity are income inelastic. Moreover, the analysis
detects complementarity between education and the rest of
the goods and services, and substitution between health care
and household equipment, clothing, and telecommunication
services. These results help in understanding recent
socioeconomic development patterns in Vietnam and provide
updated evidence to support business decisions and economic
policy planning. |
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