The main objective of this study is to answer the key research question: how, and to what extent, has farmland loss affected household income and its components in Hanoi' sub-urban areas, Vietnam. | International Journal of Business and Society, Vol. 15 No. 2, 2014, 339 - 358 THE IMPACT OF LAND LOSS ON HOUSEHOLD INCOME: THE CASE OF HANOI'S SUB-URBAN AREAS, VIETNAM Tran Quang Tuyen♣ Vietnam National University, Hanoi Vu Van Huong Academy of Finance, Hanoi, Vietnam ABSTRACT Using a novel dataset from a 2010 household survey, this study has provided the first econometric evidence of the impacts of farmland loss (due to urbanization and industrialization) on total household income and its sources in Hanoi's sub-urban areas, Vietnam. It was found that the loss of farmland had a positive impact on nonfarm income and other income but a negative impact on farm income. More importantly, the results showed that farmland loss had no negative effect on total household income. The above findings suggest that under the impacts of land loss, households have actively participated in nonfarm activities in order to supplement their income with nonfarm incomes, which in turn might have compensated for the loss of farm income due to land loss. Therefore, the loss of farmland should not be considered as an absolutately negative factor as it can help households improve their income by motivating them to change their livelihoods towards nonfarm activities. Keywords: Farmland Loss; Land Acquisition; Land-Losing Households; Nonfarm Income; Hanoi. 1. INTRODUCTION In Vietnam over the past two decades, escalated industrialization and urbanization have encroached on a huge area of agricultural land. It was estimated that, from 1990 to 2003, 697,417 hectares of land were compulsorily acquired by the State for the construction of industrial zones, urban areas and infrastructure and other national use purposes (Le, 2007). Between 2000 and 2007, about half a million hectares of farmland were converted for nonfarm use purposes, accounting for 5 percent of the country's farmland (VietNamNet/TN, ♣ Corresponding author: Faculty of Political Economy, University of Economics and Business, .
