Gift-giving behavior and household welfare in Vietnam: A quantitative analysis

Practices of gift-giving play a prominent role in every aspect of the socio-economic life of individuals from the developing world. Deeply ingrained in national culture, gift-giving behavior is shaped and regulated by social norms, in particular the norm of reciprocity. Conforming to such norminduced behavior is a way to facilitate social connectedness, strengthen sentimental relations, and maintain social status, ultimately affecting the overall well-being of every unit of society in general and households in particular. This thesis aims to investigate the impact of gift-giving practices on household welfare in Vietnam, a transitional economy in Southeast Asia where social customs and traditional values dominate civil life, and thus gift transfers are considered common practice in this country. Exploiting three waves of datasets from 2010, 2012 and 2014 excerpted from the Vietnam Household Living Standards Survey (VHLSS) conducted by the General Statistics Office of Vietnam and instrumental variable regression method, I find that gift transfers have a positive welfare effect on families in the sense that such transfers can enhance the resources of households via improved assets and income and increased access to welfare goods such as health care. In the extended analysis, I also discover that a policy on restricted event attendance as proposed by Bulte, Wang, and Zhang (2018) in response to the gift competition phenomenon is not effective in the context of a temporally stable household expenditure structure. This substantiates the non-existence of severe gift competition in Vietnam; in other words, costs of gifting are well compensated by its benefits.