Assessing the Impact of the Comparative Advantage of Agricultural Labor on Food Consumption in Vietnam

An Endogenous Switching Regression Analysis

Abstract

This paper analyzes an impact of specialization in farming and non-farm employment on farm household food consumption in Vietnam by using data from Vietnam Household Living Standard Survey 2012. To mitigate self-selection bias due to unobserved factors affecting both non-farm employment decision and food consumption such as farmers' ability, we employ endogenous switching regression. We find that the effect of specialization in farm activity and participation in non-farm activity differ from region to region. The results suggest that not only enrolling in a non-farm sector but also specializing in farming increase Vietnamese farmers' welfare in some regions.