The role of villages in households’ poverty exit: evidence from a multilevel model for rural Vietnam

Vietnam experienced a dramatic drop in overall poverty during the 90s. However, the poverty reduction showed substantial variation across households, villages and regions. Using a multilevel model on panel data from the rural sample of the Vietnam Living Standard Measurement Survey we demonstrate the important role of villages in household poverty exit dynamics. We also show how an analysis of village-level random effects predictions can help targeting of policies to reduce poverty.