Estimating Vietnam’s income mobility in 2004 – 2008: a test – retest correlation approach

Abstract

The economic growth of Vietnam in the 1990s has been a popular topic among the economists because there are many aspects of it are subjected to development studies. This paper attempts to explore one of these aspects, the income mobility of the economy, during the period 2004-2008 by estimating expenditure mobility, using Vietnam Household Living Standard Survey (VHLSS) data. This is done by applying a methodology that Heise (1969) developed in his work on test-retest correlations, to reduce the classical upward bias due to measurement errors. We estimate the mobility to be 0.035 to 0.092 which indicate a low mobility in Vietnam. This estimation allows us to draw out some implications about income inequality in Vietnam.