The Effects of afta on Macroeconomic Variables and Poverty: Evidence of Laos
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- Bu səhifədəki naviqasiya:
- Baseline Simulated Change
- 3. Poverty impacts (headcount index, percentage) 1. Mean welfare change 2. Gini index as percentage
- Variables Definition Unit Dependent Variables
- Explanatory variables
- Household characteristics
- Environmental factors
- Factors of production
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Table 7-6.Summary of the results of the micro-simulation Source: authors’ micro-simulation model result.
Baseline Simulated Change per capita (kip) per capita (kip) in percentage National -614,737
-541,908 11.85
Rural -332,467
-265,662 20.09
Urban -1,467,895 -1,376,859 6.20
Region Vientiane (capital) -2,961,939 -2,867,558 3.19 North
-499,082 -460,666
7.70 Central
-912,230 -877,969
3.76 South
687,737 874,479
27.15 Baseline
Simulated Change (%) National 45.26
44.88 -0.39
Rural 44.56
45.32 0.76
Urban 45.87
44.15 -1.72
Region Vientiane (capital) 48.03 44.17
-3.86 North
43.84 44.22
0.38 Central
42.88 45.08
2.20 South
42.37 46.35
3.99 Baseline
Simulated Change (%) National 25.78
29.59 3.81
Rural 29.65
29.04 -0.62
Urban 20.26
30.38 10.12
Region Vientiane (capital) 16.79 28.93
12.14 North
31.77 28.21
-3.56 Central
27.35 32.34
4.99 South
22.18 23.37
1.19 3. Poverty impacts (headcount index, percentage) 1. Mean welfare change 2. Gini index as percentage 32
Despite increasing welfare from AFTA, the impacts of AFTA are heterogeneous. In order to analyze the detailed impacts of AFTA on households, we use the logit model to investigate the factors which influence absolute gains or losses of welfare (Gi). The dependent variable is welfare (Gi) which was calculated in the previous chapter. If a household gains from AFTA it is labeled 1 and if it loses is 0. The explanatory variables describe various attributes of different households (for more details see Table 1).
Following the literature from Anderssson et al. (2005), Warr (2010) and Chen and Ravallion (2003), the explanatory variables can be divided into three categories: factors of production, household characteristics, and environmental factors. The multi-regression equation relationship between the probability to gain or lose in welfare and explanatory variables can be expressed as follows:
Gi = ?????? + ?????? ??????
?????? ??????
+ ?????? ??????
?????? ??????
+ ?????? ??????
?????? ??????
+ ε………………………………………….. (1)
???????????????????????? (???????????? = 1) = 1 1+?????? −???????????? …………………………………………………. (2) Where:
Prob = Probability of gains in household welfare (Gi)
?????? −??????
?????? = Irrational number to the power of Gi
household gains in welfare from AFTA; otherwise equal to zero V = Vectors of factors of production. W = Household characteristics. X = Environmental factors. i i γ β α , , and i δ are unknown parameters and ε is a normally distributed random error term.
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Table 1: Variable and Definition Variables Definition Unit Dependent Variables
Gi Gi is measured household gains or lose of welfare from AFTA gains =1; lose=0
Explanatory variables
Factors of production Irrigation Access Irrigation Access to village yes =1; other = 0 Number of Cattle Number of Cattle per household Number
Number of Buffalo Number of Buffalo per household Number Number of Pigs Number of Pigs per household Number
Literate Total Total number of Literate in household person Literate Females Literate Females person
Education Education level of household head in years year Adults Number of Adults in household person
Rice farm land Rice farm land Area of household hectare Other Cultivation land Other Cultivation Land Area of household hectare
Lowland Area Village located at Lowland Area hectare
Chemical use for Planting Chemical use for Planting yes =1; other = 0
Business Household owned Business yes =1; other = 0
Household characteristics
Dependency Ratio Decency Ratio ratio
Household Male Head of Household yes =1; other = 0
Age of Household Head Age of Household Head year Age Squares Age Squares of Household Head year
Environmental factors
Access to All season Road Access to All Season Road yes =1; other = 0
Electricity Access Electricity Access yes =1; other = 0
Access to Safe Water Safe Water Access yes =1; other = 0
Community Health Community Health Access yes =1; other = 0
Distance to Hospital Distance from Village to Hospital km Access to Market Village access to market yes =1; other = 0
Factors of production The choice variables are to reflect the production capacities of households and include the inputs of land, physical capital, technology, human capital and labour.
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