The impact of coffee price volatility on the migration decisions of the people of Lam Dong Province

Abstract

This research quantifies the impact of coffee price shocks at the farm gate on migration decisions of residents in Lam Dong province at the household level, using the Vietnam Access to Resources Household Survey (VARHS) dataset from 2010 to 2016. The probability of migration is measured by natural shock, coffee prices at the farm gate, income, and household characteristics, including household head characteristics and agricultural household characteristics. The study uses the intermediate variable "household income" and the control variable "household characteristics" to examine whether fluctuations in coffee prices at the farm gate have positive or negative effects on migration decisions of residents in the region. The results show that an increase in coffee prices at the gate will increase the likelihood of migration for individuals from coffee-growing households. Additionally, the research results indicate that natural shock have no significant impact on migration decisions of residents in Lam Dong province, thus refuting the initial hypothesis. Furthermore, an increase in income from coffee production tends to increase the probability of migration for members of agricultural households. The study further investigates individual migration choices and finds that as coffee prices at the gate decrease, the probability of migration increases for individuals with higher educational levels. Moreover, experimental results also show that a decrease in coffee prices affects migration decisions of individuals, acting as a factor driving or transforming migration into a livelihood strategy for those with lower educational levels. Finally, we argue that poverty reduction policies in Lam Dong, Vietnam should consider the role of support packages, subsidy programs, especially in direct forms, as an effective coping strategy