Short-term Poverty Dynamics of Rural Households: Evidence and Implications from a Developing Economy

Abstract

Although many developing countries have achieved remarkable progress in poverty reduction over the past few decades, many rural households still experience poverty or near-poverty conditions, while others fall into poverty. This research aims to investigate the underlying factors behind these transitions in poverty, including remaining poor or non-poor, escaping poverty, and falling into poverty, with a focus on rural Vietnam. For empirical analysis, this research employs panel data and multinomial logit models, which estimate the probability of multiple categorical outcomes—such as poverty dynamics—based on independent variables. The findings reveal that households headed by women or individuals with low education, households with larger numbers of children, households residing in disadvantaged communes, and households affected by health problems are particularly susceptible to poverty. Meanwhile, households with improved housing conditions and better access to resources are more likely to experience improved economic well-being and a reduced likelihood of falling into poverty or remaining chronically poor. The implications of this research underscore the need for policymakers to recognize that different socio-economic groups have different welfare statuses, necessitating tailored policies to effectively address poverty in rural areas.