Using a novel dataset from a 2010 household survey involving 477 households, this study provides the first econometric evidence for the impacts of farmland loss (due to urbanisation) on nonfarm diversification among households in Hanoi’s peri-urban areas in Vietnam. | IDPR, 36 (3) 2014 doi: Tran Quang Tuyen, Steven Lim, Michael P. Cameron and Vu Van Huong Farmland loss, nonfarm diversification and inequality among households in Hanoi’s peri-urban areas, Vietnam Using a novel dataset from a 2010 household survey involving 477 households, this study provides the first econometric evidence for the impacts of farmland loss (due to urbanisation) on nonfarm diversification among households in Hanoi’s peri-urban areas in Vietnam. The results from fractional logit and fractional multinomial logit models indicate that farmland loss has a negative effect on the share of farm income but a positive effect on the share of various nonfarm incomes, notably informal wage income. We also investigate the relationship between various income sources and income inequality using a Gini decomposition analysis. While income from informal wage work and farm work are inequalitydecreasing, other income sources are inequality-increasing. Thus, this suggests that farmland loss has indirect mixed effects on income inequality. Keywords: farmland loss, informal wage income, formal wage income, Gini decomposition, Vietnam International experience indicates that rapid urbanisation and economic growth coincide with the conversion of land from the agricultural sector to industry, infrastructure and residential uses (Ramankutty, Foley and Olejniczak, 2002). In developing countries, land beyond the urban fringe is in huge demand for various purposes, including the construction of public infrastructure, factories, commercial centres and housing. These demands for peri-urban land can bring about considerable changes in peri-urban livelihoods, for better or worse (Mattingly, 2009). According to Gregory and Mattingly (2009), urbanisation on the one hand leads to intense competition for land, deterioration and loss of access to natural resources, and these in turn have a detrimental effect on natural resource-based livelihoods. On the other .
