Household determinants of poverty in Savannakhet, Laos: Binary choice model approach

Lao PDR is one of the economically least developed countries in the world. As a member of the GMS region and the ASEAN, Lao PDR stands to benefit from the growth of the GMS region by the East West Economic Corridor that links the Central Region of Lao PDR with Thailand and Vietnam through Savannakhet. This paper uses a detailed household survey data set to identify, sign, and test the significance of the key factors that affect poverty by location and well-being subgroup among the urban, semi-urban and rural populations of Savannakhet. We found that household size, distance from the EWEC, agriculture landholding and working in the agricultural sector are causes of household poverty. Agricultural employment has a particularly large impact in rural areas. Other factors such as age, gender and educational level of the household head evidence no influence in determining poverty. One possible reason could be that infrastructure has been improved only in recent years. Thus, economic opportunities vary widely for any given characteristic of the household head.