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

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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