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Research Projects - Dr. Bezawit Beyene Chichaibelu

Impact of shocks on the vulnerability to poverty: consequences for development of emerging Southeast Asian economies.
Teilprojekt TP 03: "The capacity of agriculture to adjust to economic crisis and environmental shocks in Thailand and Vietnam"

 

Topic: Rural households indebtedness in Thailand and Vietnam: Are the rural poor more financially vulnerable due to debt burdons?

 

Household debt holding is on the rise, both in terms of numbers of households that have outstanding liabilities, in terms of the number of credit instruments used, and in terms of the total debt owed in nominal values and relative to income. Such a general pattern of rising household debt has been the cause of much concern in many countries after the recent financial crises which had household over-indebtedness as an important feature. On the one hand, an increase in household debt is desirable given its favorable effects on economic activities and welfare. Moreover, rising household debt is not always a problem in itself as it may reflect the ability of households to smooth their consumption over time or a loan taken for productive purposes. But on the other hand, too much debt burden may pose risk on households’ consumption and ability to service its debt by making it more financially vulnerable to future adverse income shocks. On this basis, a better understanding of the individual degree of indebtedness and the characteristics of indebted households is an important step in exploring the consequences which the aggregate level of indebtedness and the shocks thereupon have for the transmission of monetary policy and for financial stability. Hence, this research attempts to generate a better understanding of the degree of indebtedness of households, the changes in the level of household indebtedness over the years, the characteristics of indebted households, and the implication of household indebtedness on households’ vulnerability to income shocks in Thailand and Vietnam.

 

Objectives

1. Investigating the changing role of agriculture before and after economic crisis in Thailand

2. Analyzing the capacity of agriculture to adjust to environmental shocks in Vietnam

3. Comparing and assessing the structural adjustment processes in agriculture in Thailand and Vietnam in view of economic crisis and environmental change

4. Contribute to advancing the vulnerability concepts by incorporating agricultural household decision models

5. Advance the concept of risk measurement

 

Methodology

1. Household level data collection to establish a panel data set

2. Quantitative analysis using panel data models

 

Keywords: vulnerability, shocks, Thailand, coping strategies, rural development

 

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