Climate change and income diversification in the Mekong river delta: a panel data analysis

Abstract

The main objective of this study is to analyze the impact of climate change and other socio – economic determinants on the income diversification strategy in Mekong River Delta. The data set is drawn from the VHLSS 2010,2012 and 2014, while climatic data including temperature and precipitation are extracted from the statistics website of The Ministry of Agriculture and Rural Development (MARD). Salinity data is collected from the Vietnam Institute of Meteorology, Hydrology and Climate Change.Findings of the study show that farmers have tendency to diversify their activities to reduce risk of crops failure when there is increasing temperature in dry season and precipitation in wet season. However, it is recognized that those relationships are non-linear. Diversification behavior is discovered not to be sensitive with the salinity intrusion and other climate variables. Regarding socio-economic determinants, the household labor ratio and land area holding are found to be positively correlated with the income diversification, while educational qualification has the negative effect. A male household head would more likely to diversify their activities to disperse risk of climate change than female head. From this result, many policies are recommended in order to support farmers to access an effective diversification strategy, helping them to response actively to climate change consequences.