This study is to examine the link between income diversification and household consumption in Mekong River
Delta, Vietnam. Moreover, we also identify the factors responsible for changes in total household consumption
over time. Results show a clear link between the occupation of the household head and total household
expenditure. After controlling for household size we see that additional labour resources in a household are
associated with higher levels of household consumption. In terms of labour-quality, more educated households
enjoy higher levels of consumption. In addition, a clear pattern is that returns to female education are substantially
higher than returns to male education. Besides, access to land tends to significantly increase total household
expenditure. Furthermore, the decomposition results show that changes in characteristics play an extremely
limited role in determining changes in consumption (at the mean). While most of the increase in growth may be
attributed to changes in returns, as discussed already and as now formally shown through the decomposition, most
of the increase in consumption may be attributed to changes in the intercept.