Household business index in Vietnam: a small area estimation method

This study aims to estimate of Business or Formality Index (FI) for business households at provincial and district levels in the rural areas of Vietnam. In order to construct the FI, we implemented a survey of 900 business households in three provinces in Vietnam. Then we estimate the FI for these 900 sampled households. Next, we use a small area estimation method to combine this business household survey and the 2009 Vietnam Population and Housing Census to estimate the FI for all provinces and districts in rural Vietnam. The FI at the national level is estimated to be at 62.7 (according to the score range 1 – 100, the higher the score is, the better the index reflects business environment). The FI varies more greatly at provincial level, from 57.3 to 69.5. The FI for households tends to be higher at more developed provinces and lower at less developed provinces.