Poverty and Vulnerability in Southeast Asia

The World Bank put the concept of vulnerability in the spotlight of poverty research by presenting it in the World Development Report 2000/01 as an important component of combating poverty. The reason for assigning such a prominent position to vulnerability is threefold: It decreases current well-being, it determines future levels of poverty and it may be at the root of long-term hardship. Building on panel data from rural households in Thailand and Vietnam this book contributes to our knowledge and understanding of vulnerability in the following ways: First, it establishes that subjective expectations of respondents in developing countries help substantially to quantify risk exposure. This insight strengthens the case for using risk perception in economic research and to better target vulnerability reducing policies. Second, the book introduces a measure of vulnerability to downside risk which is complementary to comparable indices. According to this measure households in Vietnam are more vulnerable than in Thailand. However, the vulnerability of Thai households increased while the one of Vietnamese households decreased between 2007 and 2008. Third, it represents a first step towards a more complete picture of vulnerability of female-headed households in the developing world. More precisely, results suggest that widows and single women in Vietnam are not well protected against uncertainties. On the other hand, in Thailand and Vietnam de facto female-headed households are richer and less vulnerable than households headed by men.