TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION 1

1.1 THE RELEVANCE OF THE THESIS 1

1.2 FOCUS AND SCOPE OF THE THESIS 2

1.3 METHODOLOGY 3

1.4 DATA SOURCES 3

1.5 STRUCTURE OF THE THESIS 3

CHAPTER 2: THEORETICAL FRAMEWORK 5

2.1 CONCEPTS AND DEFINITIONS 5

2.1.1 HOUSEHOLD 5

2.1.2 CONSUMPTION 6

2.2 CONSUMPTION THEORIES 6

2.2.1 KEYNES CONSUMPTION FUNCTION 6

2.2.2 FISHERS INTERTEMPORAL CHOICE MODEL 8

2.2.3 MODIGLIANIS LIFE-CYCLE HYPOTHESIS 10

2.2.4 FRIEDMANS PERMANENT-INCOME HYPOTHESIS 13

2.2.5 HALLS RANDOM-WALK HYPOTHESIS 15

2.3 EMPIRICAL STUDY REVIEW 16

2.4 CHAPTER REMARKS 18

CHAPTER 3: AN OVERVIEW OF HOUSEHOLD CONSUMPTION IN VIETNAM 20

3.1 CHARACTERISTICS OF HOUSEHOLD IN VIETNAM 20

3.2 HOUSEHOLD CONSUMPTION IN VIETNAM IN 2002 21

3.2.1 HOUSEHOLD CONSUMPTION BY HOUSEHOLD INCOME 21

3.2.2 HOUSEHOLD CONSUMPTION BY REGION AND QUINTILES 22

3.2.3 HOUSEHOLD CONSUMPTION BETWEEN URBAN AND RURAL AREA 24

3.2.4 HOUSEHOLD CONSUMPTION BY HOUSEHOLD SIZE AND NUMBER OF CHILDREN 25

3.2.5 HOUSEHOLD CONSUMPTION BY HOUSEHOLD HEADS EDUCATION 26

3.2.6 HOUSEHOLD CONSUMPTION AND HEADS AGE AND GENDER 27

3.2.7 HOUSEHOLD CONSUMPTION BY OCCUPATION OF HOUSEHOLD HEAD 29

3.3 CHAPTER REMARKS 29

CHAPTER 4: MODEL SPECIFICATION AND EMPIRICAL RESULTS 31

4.1 Model specification 31

4.1.1 ECONOMETRIC FORMULATION 31

4.1.2 VARIABLES 32

4.1.2.1 DEPENDENT VARIABLE 32

4.1.2.2 EXPLANATORY VARIABLES 32

4.2 Data and estimation procedure 36

4.2.1 DATA DESCRIPTION 36

4.2.2 ESTIMATION PROCEDURE 39

4.3 Estimation results 39

4.4 Chapter remarks 44

CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS 45

5.1 CONCLUSIONS 45

5.2 RECOMMENDATIONS 46

5.3 LIMITATIONS AND SUGGESTION FOR FURTHER STUDIES 47

BIBLIOGRAPHY 48

APPENDIX 5