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Introduction I. THE RESEARCH TOPIC An
obvious thing in developing countries is that higher income allows people to
raise their nutritional status. Conversely, higher food prices generally
translated into reduced nutritional status of poor people. It is expected that
those are also true for Vietnam. However, effects of income and food prices on
nutritional status by location (urban and rural areas), by gender (male and
female), and by household head (male- and female-headed households) are not
known clearly. Those questions interest the author to choose the topic "The impact of income and price factors on
nutritional status in Vietnam" to examine relations between income,
food prices and nutritional status by location, by gender as well as by
household head, in addition to those relations in the whole country. In each
disaggregated case, the author hopes to find that the positive impact of income
and the negative impact of food prices are stronger on nutritional status of
rural population than on that of urban population; the positive impact of
income and the negative impact of food prices are stronger on nutritional
status of female than on that of male; and the positive impact of income and
the negative impact of food prices are stronger on nutritional status of people
living in a female-headed household than on that of people living in a
male-headed household. II. THE CENTRAL RESEARCH QUESTION 1. Objectives of the research 1.1. General objective: To
find out whether individual nutritional status in Vietnam is responsive to
income and food prices. 1.2.
Specific objectives: ¨ To
verify a nutritional situation in Vietnam, compare it with other developing
countries and within the country. ¨ To
examine impacts of income and food market prices on nutritional status in
Vietnam. ¨ To
specify the magnitude of the nutritional impact between urban and rural areas,
between male and female, and between male- and female- headed households. 2. Scope of the research Relationships
between income, food prices and nutritional status are analyzed for all
Vietnamese, both children and adults. Nevertheless, chapter four will focus on
adults to measure the impact of income and food price factors on their
nutritional status through econometric models. III. METHODOLOGY 1. Data sources The
thesis studies the impact of income and food prices on nutritional status in
Vietnam by using data from the second Vietnam Living Standards Survey (VLSS
98). 2. Study design The
thesis will employ descriptive, comparative and statistical methods to deal
with the research question. IV. STRUCTURE OF THE THESIS The
thesis consists of four chapters, following the introduction part. Chapter
1: Theoretical framework. Chapter
2: Empirical studies on demand theory and health outcomes in some developing
countries. Chapter
3: Nutritional status in Vietnam. Chapter
4: The impact of income and price factors on nutritional status in Vietnam. The
thesis ends with some conclusions and recommendations to improve nutritional
status in Vietnam. Chapter 1: Theoretical framework This
chapter presents an overview of nutrition, explains nutrition problems from an
aspect of individual consumption behaviors, and introduces a general model for
estimating health outcomes. I. CONCEPTUAL DEFINITION 1. Understanding malnutrition According
to Jean Mayer (1976), malnutrition is classified into four types: -
Overnutrition -
Dietary deficiency -
Secondary malnutrition -
Undernutrition In
this thesis, undernutrition is a
problem that the author will concentrate on. The term 'malnutrition' is also
limited to undernutrition. 2. Assessment of nutritional status 2.1 Assessment of nutritional status of
children Three
indicators commonly used for the nutritional status of children are
height-for-age, weight-for-height and weight-for-age. They are calculated in
terms of z-scores. According to the World Health Organization's
recommendations, a child who has a z-score value of minus two standard
deviations or below is regarded as malnutrition. 2.2 Assessment of nutritional status of
adults For
adults, the Body Mass Index (BMI) or Quételet's
index is a good choice for the anthropometric assessment of nutritional status.
Generally, an individual who has a BMI value of over 18.5 is considered to
signify adequate nutrition or be normal. Otherwise, those who have a BMI value
under or equal 18.5 give a sign of chronic energy deficiency (CED). This index
is best suitable for individuals between the ages of 20 and 65 years, excluding
women who are pregnant or breast-feeding. 3. The consequences of undernutrition Undernutrition
can affect almost every facet of an individual's life, and then on his family
and on society. It causes reduced mental and physical activities for both
children and adults, and of course leads to losses in human capital. 4. World food, income and nutrition
situation On
the whole, the world produces a surplus of food. Nevertheless, serious
malnutrition in developing countries is a result of food shortage. Malnutrition
apparently is a problem of distribution of food and income among countries,
regions, income groups, between sexes and within households. The solution to
malnutrition now may be to redistribute of global income and to give the poor
adequate purchasing power (to meet food needs). II. THEORY OF CONSUMER BEHAVIOUR 1. Traditional demand theory The theory implies that consumers always
choose the commodity bundle to maximize the preference they can achieve given
the budget constraint available to them. 2. Theory of Household Some
theories consider household as an individual (the unitary model) that makes
decision on behalf of every member in the household. Some others analyse it as
a group of individuals (the collective model) where each member has different
preferences and bargains with each other over household resources. The latter
offers a richer structure to behaviour than the former does. However, in
assessing health outcomes (particularly, nutritional status), the former is
usually preferred as there is no need to process decision-making within
households. 3. Laws of economics In
history of food consumption analysis, household's reactions in its consumption
decisions to changes in income and prices are formed as the economic equivalent
of laws. III. REDUCED-FORM DEMAND RELATIONS Under
the assumption of the one-period, household-firm model with constrained
maximization of a join utility function, Behrman and Deolalikar (1988) give a
set of reduced-form demand functions, with all of the endogenous variables for
the household in the left-hand side and all of the exogenous variables to the
household in the right side. Reduced-form relations are a useful guidance on
the choice of endogenous and exogenous variables to estimate health and
nutrition outcomes. Actually, those are a background for the author to choose
income and price variables to verify the impact of them on nutritional status
of the Vietnamese in chapter 4. IV. SUMMARY The
nutritional status of a person is very closely related to his or her food
consumption. Bad nutritional status results in reduced physical and mental
activity, stunted growth and even death… The causes of undernutrition are
various, but all of them are virtually connected to low purchasing power or
poverty in broader sense. The
relationship between income, price and nutritional status may be explained
through demand theory. Because of budget constraints, people must allocate
their resource to food and non-food items, and to various kinds of food to
maximize their satisfaction. Their choice of food, therefore, influences their
nutritional status. The
impact of income and food prices on nutritional status can be estimated through
a reduced demand for health outcome function despite the fact that the results
may be biased. Theoretically,
the nutritional status of individuals can be made better if their incomes are
raised up or food price policies are set reasonably. However, performances need
to be considered carefully in practice. Some empirical studies will be
mentioned more clearly in chapter 2. Chapter 2: empirical studies on demand theory
and health outcomes in some developing countries Chapter
two now is more directly concerned with empirical results of demand theory and
nutritional outcomes in the household in developing countries. Some points
drawn from this chapter are as follows: -
Individual nutritional status is associated with household income and
entitlement to food at the household level. It is easily responsive to income
and price fluctuations in developing countries. In general, household income
has a positive nutritional impact on the members. However, market prices have
inconsistent results: reduced prices of most of food items permit a higher
nutritional status but increased prices of some kinds of food also make the
nutritional status better. -
Intra-household distribution is unequal throughout developing countries.
"Some members of households with inadequate aggregate food intake may not
be malnourished, and not all malnourished individuals come from households with
inadequate aggregate food intake". And there are, in fact, very
asymmetrical treatments between men and women around the world. -
Besides policies regarding to income creation and price intervention have
impacts on the nutritional status of individuals within household, policies
that change the mechanisms themselves of control of household income do that as
well. Chapter 3: Nutritional status in Vietnam This
chapter analyzes nutritional status in Vietnam through descriptive and
comparative methods. I. NUTRITIONAL PROBLEMS IN VIETNAM 1. General background The
transition of Vietnam from a centrally planned to a market economy has been
successful. Vietnam, however, remains one of the world's poorest countries.
Nutritional status of the Vietnamese is a serious problem of the whole society. 2. Nutritional status in Vietnam A
prevalence of malnutrition in Vietnam is among the highest rate in the world.
The latest surveys estimate that 36.7%, 38.7% and 9.8% of children under five
are underweight, stunted and wasted, respectively, and CED prevalence among
adults (from 18 years old, excluding pregnant women) is 30.25%. Moreover,
malnutrition is very different by gender and age. Prevalence of malnutrition
among population is presented in table 1. Table 1: Prevalence of malnutrition in
Vietnam by gender, 1997-98.
Source: Vietnam
Living Standards Survey, 1997-98. Note: - a:
anthropometric indicators less than minus two standard deviations from the
median of the NCHS sample - GSO, 2000, pp. 116, 118 & 120, -
b: BMI equal or less than 18.5 - author's
calculation. 3. Causes of undernutrition 3.1.
Immediate cause 3.2.
Underlying cause 3.3.
Basic cause. 4. Losses of undernutrition Vietnam
suffers enormous economic and human losses from undernutrition annually.
According to an estimation of NIN, about 29 per cent of child deaths each year
or 180,000 child deaths per year were related to PEM (excluding deaths of
mildly malnourished children); and PEM reduced 0.3 per cent of GDP per year or
674,000 million Vietnamese Dongs per year (this figure was calculated only on
reduced productivity of malnourished adults, it did not include additional
losses due to cognitive impairment or custodial care related to childhood
nutritional deficiencies). II. FOOD CONSUMPTION PATTERNS 1.
Demand for food 2. Food expenditure 3. Composition of food expenditure 4. Food expenditure by gender of household head In conclusion,
a larger share of household budget is spent on food (compared to other non-food
items) in Vietnamese households, in which, rice consumption is largest, but
milk, egg consumption is smallest. Those suggest that rice is necessity but
milk and egg are luxuries for almost Vietnamese. Furthermore, when household
expenditure increases, a food share will reduce but more luxury food items will
rise. All these happen as in the Engel's law and Bennett's law. III. INCOME AND NUTRITIONAL STATUS IN
VIETNAM 1. Income and
nutritional status by years In
recent years, Vietnam's economy has grown rapidly, accompanied with increased
per capita income. In parallel, the malnutrition rate has dropped
significantly. The relationship between income and child malnutrition at
different points in time in Vietnam is illustrated in figure 1.
Source:
Author's calculation from Appendix 3.3 (in the thesis) It is easy to see a negative correlation between
income and malnutrition from two Vietnam Living Standards Surveys presented in
table 2. Table 2:
Expenditure and Malnutrition in two VLSS, 1992-93 and 1997-98
Source:
Table 3.5 in the thesis. 2.
Income and Nutritional status by expenditure quintile The relationship
between income and nutritional status is able to be examined through different
expenditure quintiles. A proportion of malnourished people among quintiles is
showed in figure 2.
3. Income and
Nutritional status by region Table
3: Malnutrition rate in Vietnam by urban/rural area, 1997-98.
Source:
Vietnam Living Standards Survey, 1997-98 (see note in the thesis). 4. Income and
Nutritional status by gender of household head Table 4:
Income, expenditure and nutritional status by gender of household head, 1997-98
Source:
Vietnam Living Standards Survey 1997-98. IV. SUMMARY It is agreed that undernutrition is an urgent
concern of Vietnam. It can impair generations of citizens mentally and
physically at present and in the future. The situation is even worse in rural
areas. One of underlying causes of undernutrition is food poverty or low
income. A clear trend in the consumption pattern is that the higher the living
standard, the higher the people's need for both quantity and quality of food;
the consumption structure improves along with the increase of income. A common conclusion from this chapter is that
prevalence of undernutrition reduces as income increases. This has implications
for economic policies: raising income or alleviating poverty is a necessary
solution. Nevertheless, how is the magnitude of the impact of income on
nutritional status in the whole country? The answer must be based on regression
models and will be solved in the next chapter. In chapter four, the magnitude
and direction of the impact of food prices on nutritional status of the
population will also be measured. Furthermore, there are disaggregated studies
on the magnitude of the impact of income and prices according to location, sex
and gender of household head in that chapter. Chapter 4: The impact of income and price
factors on nutritional status in Vietnam I. DATA AND METHODS 1. Data source The
analysis is based on data from the second Vietnam Living Standards Survey,
undertaken in 1997-98. The largest sample of adults (aged 20 to 65 years) for
which data on all the variables of prices (35 food items) are available is
summed up in table 5. Table 5: BMI of adults (age 20-65 years)
in Vietnam, 1997-98.
Source: author's
calculation from data of VLSS 98. 2. Methodology Variables
on income and prices are taken into account. The author will use correlation
and regression analysis, which rests on some assumptions and ways of choosing
variables and methods (see the thesis). II. RESULTS 1. Correlation
analysis 2. Multivariate analysis 2.1.
A continuous model Results
of the estimated coefficients for the sample in all, by urban/rural areas and
by sex are given in table 6. - Expenditure impacts on adult's
nutritional status: In
general, nutritional status of adults is positively associated with per capita
expenditure in the whole country (the elasticity of BMI with respect to
income/expenditure is .0077). Nevertheless, the expenditure impact on BMI is
different for rural and urban areas, for men and women. The result in models
for urban and rural areas is different from the author's expectation. However,
the result in models for male and female happens as expected. - Price impacts on adult's nutritional
status: Overall,
market prices influence nutritional outcomes of the population. Lower food
prices are correlated with higher BMI, but magnitudes of the impact rely on
what kind of foods. The adverse price effects of these foods remain unchanged
when the sample is stratified by gender. As expected, the coefficients of
prices suggest that men's health is more protected than does women's health
when prices change. Price effects, on the other hand, are not uniform when the
model is estimated separately for rural and urban areas. Table 6: Impacts of expenditure and
prices on adult BMI in Vietnam, 1997-98.
Source: Author's
calculation based on data from VLSS 98. Note: - All independent variables are in the
log form. -
Dependent variable is log of BMI of all adults between 20 and 65 years of age. 2.2. A logistic model It
is easily recognized that all results of the logit model are consistent with
those seen in the continuous one. Individual nutritional status improves with
increased income or reduced prices. Table
7: The logit model of Chronic Energy Deficiency (CED) in Vietnam, 1997-98
Source: Author's
calculation based on 2865 observations from data of VLSS 98. Note:
All independent variables are in the log form, adults are from 20 to 65 years
old. 2.3. Adult nutritional status in
households by gender of head The
common feature is that expenditure has a positive impact and prices have
negative impacts on nutrition of members of each household type. The elasticity
of BMI with respect to expenditure seems to be equal among members of those
households (.0077 for male- and .0073 for female-headed household). However,
responsiveness to variations in prices is not the same. Table
8: Effects of expenditure and prices on adult's nutritional status by gender of
household head in Vietnam, 1997-98.
Source: Author's
calculation based on data from VLSS 98. Note: - All
variables are in the log form, -
Adults are between 20 and 65 years of age, except pregnant and breast-feeding
women. III. SUMMARY -
On overall, correlations between adults' nutritional status and their incomes
are positive. On the other hand, correlations between adults' BMI and food
prices are negative. -
Magnitude of the impact of income and prices on individual nutritional status
varies among location and gender. Generally, rural adults seem to get less
benefit from income growth than urban ones, but are likely to be more affected
by changes in prices than ones living in urban areas. In terms of gender, women
are more sensitive to changes in income and prices than men. In other words,
men receive a slightly preferential treatment in household resource allocation.
-
Gender of household head influences nutritional status of the member, but difference
in nutritional outcomes is small. Members of female-headed households take a
bit higher nutritional risk than who of male-headed households. Or male-headed
households are more secured when income and food prices vary. CONCLUSIONS
AND RECOMENDATIONS 1. General review The
root for the analysis is underpinned on the theory of demand. Given the budget
constraint and market prices, a consumer or a household will consume a bundle
of goods and services that maximize the preference. In practice, food expenditure
often takes a large part of incomes of the poor. Moreover, when income
increases, people tend to reduce a food share in total expenditure and buy more
qualified food in food consumption pattern. Basing
on a household model of constrained maximization, reduced-form demand functions
are constructed to specify relations between income, food prices and individual
nutritional status in developing countries. A common phenomenon in those
countries is that the poor are susceptible to income and prices. Increased
incomes make nutritional status of the poor better-off, but increased prices
make nutritional status of the poor worse-off. 2. Conclusions for Vietnam 2.1.
Although aggregate elasticities of demand have not been estimated in Vietnam,
data from the VLSS 98 affirms that food consumption patterns of the population
are sensitive to changes in income. Food volume increases with the increase of
income, but the proportion of food expenditure to total expenditure declines as
income goes up; it reaches nearly 64 per cent in the poorest quintile, more
than one point five times as high as among the richest quintile, 40 per cent.
Composition of food expenditure also varies as income increases; a share of
cereal (say, rice) gradually reduces and is replaced by a share of
high-nutrient foods (say, meat) from low-income to high-income quintiles. They
are all suitable to demand theory and economic laws. 2.2.
Undernutrition in Vietnam is negatively related to income. The rate of
undernutrition falls from the rich to the poor, from urban to rural areas, and
from high-income to low-income regions. The highest prevalence of CED is found
in the poorest quintile (about 37 per cent) and the lowest prevalence is found
in the richest quintile (about 23 per cent). About 45 per cent of children are
stunted in rural areas, nearly twice as high as that in urban areas (23 per
cent). 2.3.
It is confirmed that income and price factors actually affect the Vietnamese's
nutritional status: -
Income has a positive correlation with nutritional status. In contrast, food
prices have a negative correlation with nutritional status of the population.
If per capita income increases by one per cent, on the average the adult's BMI
will increase by nearly .008 per cent, holding other variables constant. If
price of paddy increases by one per cent, on the average the adult's BMI will
decrease by nearly .014 per cent, holding other variables constant. -
Nutritional status of the population living in rural areas is more responsive
to changes in income and prices than nutritional status of those living in
urban areas. For example, if price of cooking oil increases by one per cent, on
the average the adult's BMI will decrease by »
.014 per cent in rural, but just by »
.009 per cent in urban areas, holding other variables constant. -
Nutritional status of female is more responsive to changes in income and prices
than that of male. For example, if per capita income increases by one per cent,
on the average the male adult's BMI will increase by » .005 per cent,
but the female adult's BMI will increase by »
.01 per cent, holding other variables constant. -
Nutritional status of members in female-headed household is more responsive to
changes in income and prices than nutritional status of members in male-headed
household. For example, if the price of sugar increases by one per cent, on
average the adult's BMI in male-headed household will decrease by .018 per cent
but the adult's BMI in female counter-part will decrease by .023 per cent,
holding other things constant. 3. Recommendations 3.1.
Increasing income or reducing poverty is an urgent task of the government.
Programmes on generating incomes and resolving unemployment need to be
promoted. Incentive measures should be provided to households to help them
produce incomes on their own. 3.2.
There should be a national policy to stabilize food prices. Furthermore, the
government should intervene into pricing some main foods to benefit or support
a particular group when necessary. 3.3.
Macroeconomic policies should concentrate on strengthening the agricultural
sector. Increased agricultural production will contribute to raise farmers'
incomes and lower food prices, and hence improve nutritional status. 3.4.
The majority of Vietnam's population, its labor force, and its poor live in
rural areas, where livelihoods primarily depend on small-scale agriculture and
the prevalence of malnutrition is much higher than in urban areas. These
highlight the focus on improving nutritional status of rural population.
Macroeconomic policies should target to promote rural development. The
Government should pay more attention to develop infrastructure, export
industries, agricultural production, as well as labor-intensive industries in
rural areas. 3.5.
Policies that concentrate on females should be put into practice. It is
suggested that women's status, their autonomy or control of resources, and
their employment opportunities need to be recognized and enhanced. 3.6.
The government should stimulate the process of data collection and assessment
on regular basis in order to have matrices of income and price elasticities for
specific foodstuffs by income class, so that suitable policies on income and
prices could be developed to improve nutritional outcomes. 3.7.
To educate and inform people the knowledge of nutrition so that they can choose
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