UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE Vietnamese-Dutch Project for M.A Program in Development Economics EFFECT OF INCOME ON NUTRIENT INTAKE THE CASE OF HOUSEHOLDS IN THE SOUTHEAST REGION OF VIETNAM- 2000 A thesis presented by Nguyen Phuong Chi In Partial Fulfillment of the Requirements for Obtaining the Degree of MASTER OF ARTS IN ECONOMICS OF DEVELOPMENT Supervisors M. Nguyen Hun Dung Dr. Le Bach Mai THU V1L~l"~ .-·~~~ D ~~""'"~'~•·-''"r~"="~ CERTIFICATION " I certify that the substance of this dissertation has not already been submitted for any degree and is not being currently submitted for any other degree. I certify that to the best of my knowledge any help received in preparing this dissertation, and all sources used, have been acknowledged in this dissertation." ACKNOWLEDGEMENTS First of all, I would like to express my acknowledgement to Dutch Lady Vietnam Food and Beverage Company for their sponsorship to my trip to the National Institution of Nutrition in Hanoi to finish this thesis.
I also convey my gratitude to the University of Economics - Ho Chi Minh City, the Institute of Social Studies - The Hague and the National Institution ofNutrition for creating such good chance for me to do the research. I am deeply indebted to my supervisors, Mr. Kees Voogd, the Innovation Manager and Mr. Nguyen Huu Thiet, the Human Resource Manager of Dutch Lady Vietnam Food and Beverage Company; Mr.
Nguyen Huu Dung, the coordinator of the MDE program; Dr. Nguyen Cong Khan, the director of the National Institution of Nutrition, Dr. Le Bach Mai, the manager of the Public Nutrition Department and Dr. Vu Quynh Hoa, staff of the National Institution of Nutrition for their valuable instructions, comments and suggestions during the process of writing the report.
Finally, I wish to express my thanks to my parents, relatives and friends for their spiritual encouragement and material support. Without those sources, the thesis would have been made impossible. I alone bear full responsibility for any errors remaining in the report. Nguyen Phuong Chi Ho Chi Minh City, August 2003 ABSTRACT It is a fact that 75 percent undernourished children lives in India, Bangladesh, Pakistan, Indonesia, Nigeria and Vietnam (Foster and Leathers, 1999).
Still, developed countries like European and the United States give a lot of attention to this problem. They increase incomes of the poor and food production per person to avoid malnutrition (Wolfe and Behrman, 1983). Unfortunately, Engel's law stated that as incomes grow, people would reduce the food spending proportion in their budget and increase the budget share for non-food commodities. Besides, people often consume foods to suit their tastes and habits rather than to get more calories in their choice.
The thesis examines the effect of income on nutrient intake of households in the Southeast region of Vietnam in 2000. All the data is taken from The National Food and Nutrition Survey of the National Institution of Nutrition (NIN) in 2000. Regression result analyzes show that there is a positive effect of expenditure on calorie intake but the effect is rather low. People have shifted their spending to animal foods such as meat, eggs, milk and milk products.
Gender does not have any correlation with calorie intake. 2 TABLE OF CONTENTS CERTIFICATION. 2 TABLE OF CONTENTS. 3 LIST OF TABLES.
6 LIST OF FIGURES. 7 ACRONYMS AND ABBREVIATIONS .2 OBJECTIVES OF THE THESIS 11 1.6 THE ORGANIZATION OF THE THESIS 13 CHAPTER 2: LITERATURE REVIEW AND EMPIRICAL STUDIES .1 CONCEPTS OF NUTRIENT INTAKE AND THE HOUSEHOLD 15 2.1 THE THEORY OF CONSUMER CHOICE .1 The Traditional Model of Consumer Behaviour .1 Assumptions of the model. The Budget Constraint and The Budget Line .4 Income effect on Consumption. Criticisms on The Theory ofConsumer Choice.
Advantages of The Theory of Consumer Choice. Disadvantages ofthe Theory of Consumer Choice .2 MODELS OF INTRA-HOUSEHOLD ALLOCATION .1 The Unitary Model .2 The Collective Model .3 EQUIVALENT LAWS OF ECONOMICS .4 MEASUREMENT ERRORS OF NUTRIENT INTAKE .1 NUTRIENT INTAKE AND INCOME .1 Studies with low calorie income elasticities .1 Study ofBehrman and Wolfe (1983) .2 The study ofBehrman and Deolalikar (1987) .3 The study ofTimmer and Alderman (1979). 2 Studies with high calorie income elasticities .1 The study of Pitt (1983) .2 The study ofPinstrup-Andersen and Caicedo (1978) .2 NUTRIENT INTAKE AND HOUSEHOLD CHARACTERISTICS .1 Nutrient intake and household size and demographic structure. 2 Calorie intake and household head.
3 Calorie intake and female education .4 CONCLUSION 38 CHAPTER 3: SOCIAL AND ECONOMICAL SITUATION, FOOD CONSUMPTION AND NUTRIENT INTAKE IN THE SOUTHEAST REGION OF VIETNAM: GENERAL PICTURE .1 SOCIAL AND ECONOMICAL SITUATION IN THE SOUTHEAST REGION OF VIETNAM 40 3.2 FOOD AND NUTRITION SITUATION IN THE SOUTHEAST REGION OF VIETNAM 41 3.3 SOME NUTRITIONAL PROGRAMS IMPLEMENTED TO SOLVE MALNUTRITION PROBLEMS IN VIETNAM 43 3.4 CONCLUSIONS 45 CHAPTER 4: ANALYTICAL FRAMEWORK AND RESEARCH METHOD ••.1 TRANSFORMING CONCEPTS INTO VARIABLES .1 The nutrient intake .2 Sample size and sampling .4 METHOD OF ANALYZING DATA. 54 CHAPTER 5: EFFECTS OF INCOME ON NUTRIENT INTAKE OF HOUSEHOLDS IN THE SOUTHEAST REGION OF VIETNAM IN 2000 .1 FOOD CONSUMPTION PATTERN, NUTRIENT INTAKE AND HOUSEHOLD CHARACTERISTICS 55 5.1 FOOD CONSUMPTION PATTERN .1 DESCRIPTION OF VARIABLES .2 RELATIONSHIP BETWEEN CALORIE INTAKE AND TOTAL EXPENDITURE, CALORIE INTAKE AND ENERGY ORIGINATED FROM ANIMAL PRODUCTS .1 Calories per capita and total expenditure of household. 2 Calories per capita and calories originated from animal foods. 70 CHAPTER 6: CONCLUSIONS AND POLICY RECOMMENDATIONS.
~87 5 LIST OF TABLES Table 2.1 : Income and expenditure elasticities of calorie demand .1: Mean share (%) of food groups in total calories consumed by a household by regions ····:······························································:.1: List of variables and expected signs in relation with calorie intake .2: Four forms of commonly used Engel functions .3: Number of households by city/ provinces in the Southeast region .1: Major food group- average intake (grams/household/day) .2: Food consumption pattern by household expenditure quintiles in the Southeast region (grams/household/day) .3: Energy composition in the Southeast region and the whole country .4: Highest diploma obtained by gender in the Southeast region in 2000 .5: Percentage of female per household who gets the highest diploma by expenditure quintile in the Southeast regionin 2000. 7: Distribution of quantitative variables .8: Calorie groups by mean total expenditure per household .9: Daily calories per capita originated from animal foods by calorie groups and expenditure quintiles .3: Functional form test. 86 6 LIST OF FIGURES Figure 2.1: Matching Consumer Desires with Available Consumer Choices .2: Income-Consumption curve and its form .1 : Percentage of children under five suffering from mild underweitght and stunting (malnutrition level 1) .1: Average consumption level of other foods in the Southeast region (grams/household/day) .2: Total expenditure and food expenditure by quintiles in the Southeast region (1 000 dongs/person/month) .3: Histogram of quantitative variables with normal curve .4: The relationship between daily calories per capita and total expenditure per household .5: The relationship between calories per capita and calories from animal foods .1: Histogram of residual from the regression on linear function with unstandardized residual .2: Histogram of residual from the regression on linear function with standardized residual. 87 7 ACRONYMS AND ABBREVIATIONS ADB Asian Development Bank BMI Body Mass Index BRVT BaRia- Vung Tau em Centimeters FAO Food and Agriculture Organization GDP Gross Domestic Product GSO General Statistical Office HCMC Ho Chi Minh City kcal Kilocalories NGO Non Governmental Organization NIN National Institution ofNutrition OLS Ordinary Least Squares PEM Protein Energy Malnutrition SPSS Statistical Package for the Social Sciences UN United Nations us United States UNICEF United Nations International Children's Fund VER Vietnam Economic Review VSED Vietnam's Socio-Economic Development WB World Bank 8 Chapter 1: INTRODUCTION 1.1 PROBLEM STATEMENT When human beings become the subject of development in any certain country, nutrition then becomes a great concern.
According to the Asian Development Bank (ADB) (2001: 26), 'Nutrition plays a very important role in welfare, and good nutrition is essential for good, long-term health for both children and adults'. A person with better nutrition and health has more capabilities to live, study, work and enjoy his life than ill people (Ingham, 1993). Socially, a country with a nourished population may yield a good chance to improve anthropometrical as well as intellectual indicators of its present and future generations (Behrman and Deolalikar, 1988), to increase output due to faster productivity (Ray, 1998) and to meet its developmental goals such as higher income and life expectancy (Ingham, 1993). Once a person's income increases, his nutritional status may be improved accordingly (Ray, 1998).
Statistics of FAO (1998) show a substantial gap between developed and developing countries in average daily kilocalorie (kcal) availability per capita. An average daily energy supply per capita of developed countries is 3,340 kcal, while that indicator of the poorest countries is just 2,060 kcal. This seems consistent with the idea of the WB in its World Development Report in 1980 that 'the most efficient long-term policies are those that raise the incomes of the poor, and those that raise food production per person' (cited in Wolfe and Behrman, 1983: 525). However, income itself is not enough to reflect the availability of each good in the market and how much of each good that a person can afford and prefer to consume (Dasgupta, 1995).
As a result, whether income is an important determinant of nutrition is still in debate (Wolfe and Behrman, 1983). According to Engel's law, when people earn additional income, they tend to spend more on non-food commodities and less on food items (Gillis et al. 9 Moreover, as the income of people goes up, they often prefer foods with higher quality rather than higher calorie content. The effects of income in the hands of men and in those of women are also different.
Women tend to care more about health and nutrition of all members in the household, especially for children, compare to men (King and Hill, ed. Over the last decade, Vietnam has made good results in human development such as income growth and poverty reduction (WB, 2001 b). From 1993 to 1998, GDP per capita grew on average 8.9 percent per year. Poverty rate, which is measured by 2,100 calories per day as stated by the WB, reduced from 55 to 37 percent during the same period.
According to reports from UNICEF in 1996 (stated in Foster and Leathers, 1999), Vietnam is on the list of 50 most seriously undernourished countries by three different measures, i. daily per capita calorie supplies as a percent of requirements, under-five mortality rate per 1000 live births and percent of children underweight. In 1999, the percentage of undernourished people in total population in Vietnam is 19 percent. Although the living standards of Vietnamese households have been improved over the last decade, their nutritional status is still in problem.
According to ADB (200 1), Vietnamese households may spend their additional income on food without referring to richer calorie content or on other non-food commodities. Besides, some recent empirical studies show that income elasticities of nutrient intake are low in poor countries (Ravallion, 1990). Therefore, this thesis will examine the effects of income change on calorie intake by using a large household-level survey on food consumption, incomes and other household characteristics of Vietnam in 2000 conducted by the NIN. In particular, data from the Southeast region will be focused for analyzing.2 OBJECTIVES OF THE THESIS Health and nutrition have been of great concern m Vietnam for a long time.
Together with better living standards and higher income, nutritional status of people should be improved. Therefore, it is important to kt1ow the impact of income change on nutrient intake of people so that the government can apply efficient policies to solve this problem. The study will focus on this situation in the Southeast region that achieved the highest speed of income growth in Vietnam .