Household size and composition are often overlooked when income poverty is measured. This leads to a distorted picture of poverty and lack of understanding of the relationship between household size and poverty. Empirical studies based on household studies in developing countries have virtually always found that poverty tends to increase with household size. But the findings that large households are poorer is based on the assumption that all individuals consume the same amount, and that two or more persons living together consume the same as if they were living separately.

In this paper, the authors analyse two household studies conducted in Vietnam in the 1990s, and show that without making adjustments for household size and composition their results are misleading. Such results overstate the absolute number of Vietnamese poor, and of poor children in particular. At the same time, they understate rural poverty, particularly amongst poorly educated people, ethnic minorities, and female-headed households. The authors thus emphasise the importance of using multiple indicators to obtain accurate data, with particular relevance for Vietnam.

Keywords: Vietnam, household size, household composition, household income, income poverty