LAUSR

We examine the factors affecting livestock production by using a two-part fixed effects model and assess the contribution of livestock production in reducing income inequality by using the Gini decomposition method. We use panel household data from four rural surveys in three provinces of Vietnam. Our results show that (1) livestock production can bring either positive or negative income; (2) positive livestock income contributes about 11% to annual household income, but this figure is only 7% if negative livestock income is included; (3) positive livestock income reduces rural income inequality by about 3.3%, but this figure becomes 1.2% if negative livestock income is included. We suggest that enhancing access to credits, promoting rural education and road conditions, and empowering rural households to better cope with demographic shocks reduce negative livestock income and consequently improve income equality. In addition, priorities should be given to the development of large livestock.