The impact of household size and income on food spending in Vietnam

Abstract

The study analyzes the impact of income and household size on per capita food expenditure in Vietnam, thereby testing the food paradox. The data for the study was extracted from the dataset of the results of the Vietnam Living Standards Survey 2018 (VHLSS 2018). After the data was connected, filtered, and cleaned, 34,448 observations were qualified. To overcome endogenous difficulties in the model, the estimation of linear Engel equations using instrumental variable regression was conducted. The findings of the study reveal that as household size increases, average food expenditure reduces, supporting the food paradox that exists in the Vietnamese food market. The positive relationship between income per capita and average expenditure on food is also confirmed in the OLS model. Research shows that households with the head being married, educated, employed (especially self-employed) have a higher average expenditure on food than those in other household groups. The average food cost per household rises in households with a high number of children and the elderly. The findings of this study will assist food companies in forecasting market demand, allowing them to develop effective business strategies and production plans. It also aids policymakers in forecasting food demand so that proper national food security policies can be implemented.