by Mr. Tadashi Kikuchi 
from Keio University

    "Aspects of Inequality in Vietnam: Measurement, Decomposition, and Intertemporal Change 1993-1998"
   Japanese (Word 200KB)     English (Word 232KB)

  The fourth workshop of JVEC was held on October 18, 2003 at GRIPS. Mr. Kikuchi Tadashi from Keio University presented his paper, “Aspects of Inequality in Vietnam : Measurement, Decomposition, and Intertemporal Change 1993-1998.”

  In the first part, the author explained the method of study, especially why he used the Theil index of inequality instead of the Gini Index: He intended to explore the decomposability of the Theil index to examine the within and between inequality for five categories: regions, rural and urban, farm and non-farm, age of household heads, and education level. Based on the results from the Vietnam Living Standards Surveys 1993 and 1998, he pointed to the increasing inequality in Vietnam during the period. He found that that there was a trend of increasing “within group” inequality, while the “between group” inequality fell. He suggested human capital, represented by the education index, as the main reason for the changes in inequality, although he only cited the positive relation between total expenditures and expenditure on education, without using any econometrical method to analyze causality.

  Opinions and discussions followed. First and foremost, while the study mainly described the situation of inequality, there was little explanation or evidence to explain the causes. Income gaps may arise from many causes including unequal incidence of globalization, rise of entrepreneurs, unequal distribution of foreign money, ignored rural areas, corruption, etc. Some inequalities were acceptable but others were not. To identify possible causes, the author could have examined relevant factors such as infrastructure, government policy, business environment, FDI, in addition to human capital which he had noted. It was necessary to empirically test the relation between inequality and these factors to arrive at policy implications. There was a suggestion that the paper should start with a hypothesis and then provide evidence for or against, which was more conventional, than to just provide mainly numbers.

  The author replied that in this study his purpose was to focus on the description of the temporal changes in inequality in Vietnam by the use of decomposability of the Theil index; however, he also emphasized that the opinions and comments at the workshop would be very useful for his further studies in the future.

  Discussion then focused on possible specific reasons of changing inequality in Vietnam between rural and urban, between high classes and low classes, and between types of businesses and households within each group. There were also questions concerning inflation adjustments, urban and rural differences in the concept of income, consumption versus income inequality, etc.