Scandinavian Working Papers in Economics

EIJS Working Paper Series,
Stockholm School of Economics, The European Institute of Japanese Studies

No 223: DETERMINANTS OF POVERTY IN LAO PDR

Magnus Andersson (), Anders Engvall () and Ari Kokko ()
Additional contact information
Magnus Andersson: Stockholm School of Asian Studies, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden
Anders Engvall: European Institute of Japanese Studies, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden
Ari Kokko: European Institute of Japanese Studies, Postal: Stockholm School of Economics, P.O. Box 6501, S-113 83 Stockholm, Sweden

Abstract: Lao PDR has been relatively successful in raising incomes and reducing poverty since the early 1990s. However, the gains in terms of poverty reduction are unevenly distributed across regions and population groups. This paper uses a detailed household survey data set to examine the determinants of income and poverty in Lao PDR. The results suggest that household size, dependency ratios, education, and access to agricultural inputs are among the main determinants of per capita consumption. In addition, geography and ethnicity matter. A closer analysis of the role of ethnicity suggests that the higher poverty incidence among minority households is due to their limited access to productive resources rather than lower efficiency in resource use. The paper also proposes some elements for a poverty reduction strategy for Lao PDR.

Keywords: Lao PDR; Laos; development; poverty; household; ethnic minorities

JEL-codes: D13; O12; O18; O53

47 pages, March 15, 2006

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