Luận văn thạc sĩ UEH determinants of households expenditure on english language education, the case

UNIVERSITY OF ECONOMICS

HO CHI MINH CITY

VIETNAM

INSTITUTE OF SOCIAL STUDIES

THE HAGUE

THE NETHERLANDS

VIETNAM – THE NETHERLANDS PROGRAMME FOR M.A IN

DEVELOPMENT ECONOMICS

DETERMINANTS OF HOUSEHOLD

EXPENDITURE ON ENGLISH-LANGUAGE

EDUCATION: THE CASE OF HOCHIMINH

CITY

MASTER OF ARTS IN DEVELOPMENT ECONOMICS

By

LUU THI KIEU OANH

Academic Supervisor

Dr. PHAM KHANH NAM

HO CHI MINH CITY, 2013

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i

CERTIFICATION

“I certify that the substance of this thesis has not already been submitted for any degree

and has not been currently submitted for any other degree.

I certify that to the best of my knowledge and help received in preparing this thesis and all

used sources have acknowledged in this dissertation”.

LUU THI KIEU OANH

Date: … Dec 2013

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ii

ACKNOWLEGMENTS

Firstly, I would like to thank so much to Vietnam – The Netherlands programme for

Master of Art in Development Economics where I have been studying useful knowledge.

I would like to express my deep gratitude to my academic supervisor, Dr. Pham

Khanh Nam for his great supports, advices and encouragements during my thesis

completion.

I thank so much for all lecturers because of their valuable supports as well as all my

family, my friends because of their helps and encouragements during my study.

One again, I am grateful to all of you. Thank you very much!

LUU THI KIEU OANH

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ABSTRACT

This study attempts to investigate household’s expenditure on English education for

primary school children using the surveyed data from 267 randomly collected households

in Ho Chi Minh City. As a result, the current payment for English education of household

in Ho Chi Minh City plays an important role in total expenditure for education. It takes up

61.4% of basic education in average. Compared with household’s total income and total

expenditure, it makes up 4.7% and 6.7% of total income and total expenditure,

respectively. The study also found that total income, total expenditure, current payment for

extra education, education level of wife and household own a house has a positive

relationship with English education expenditure.

Keywords: English education, expenditure, income

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TABLE OF CONTENTS

CERTIFICATION.............................................................................................................................. i

ACKNOWLEGMENTS....................................................................................................................ii

ABSTRACT .....................................................................................................................................iii

LIST OF FIGURES .......................................................................................................................... vi

LIST OF TABLES...........................................................................................................................vii

ABBREVIATIONS ........................................................................................................................viii

CHAPTER 1: INTRODUCTION...................................................................................................... 1

1.1. Problem Statements ............................................................................................................ 1

1.2. Research Objectives............................................................................................................ 2

1.3. Research Questions............................................................................................................. 3

1.4. Research methodology........................................................................................................ 3

1.5. The structure of the study ................................................................................................... 3

CHAPTER 2: LITERATURE REVIEW........................................................................................... 5

2.1. Theoretical literature ........................................................................................................... 5

Theory of Education expenditure: Education production function ........................................... 5

Theory of household production function.................................................................................. 6

Theory of income elasticity of educational expenditure:........................................................... 6

2.2. Empirical literature ............................................................................................................. 7

2.3. Conceptual framework...................................................................................................... 13

CHAPTER 3: RESEARCH METHODOLOGY............................................................................. 15

3.1. Sampling strategy and data collection .............................................................................. 15

3.2. Variables’ measurement and explanation ......................................................................... 15

3.3. Model specification........................................................................................................... 23

CHAPTER 4: EMPIRICAL ANALYSIS RESULTS ..................................................................... 28

4.1. General information of the Household’s characteristic in HCM City .............................. 28

4.2. General information of English education in Vietnam..................................................... 29

4.3. Importance of English expenditure in household’s decision ............................................ 31

4.4. Empirical analysis results ................................................................................................. 32

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4.4.1. Descriptive statistics.................................................................................................. 32

4.4.2. Regression results...................................................................................................... 40

CHAPTER 5: CONCLUSIONS, RECOMMENDATIONS AND LIMITATIONS....................... 46

5.1. Conclusions and recommendations................................................................................... 46

5.1.1. Conclusion ........................................................................................................................ 46

5.1.2. Recommendations ............................................................................................................. 46

5.2. Limitations........................................................................................................................ 47

REFERENCES ................................................................................................................................ 49

APPENDIX ..................................................................................................................................... 52

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LIST OF FIGURES

Figure 2.1 Analytical framework for the impact explanatory variable on English education

expenditure.......................................................................................................................... 14

Figure 4.1 The education level of the parents in Ho Chi Minh City – Author’s survey 2013 .

............................................................................................................................................. 29

Figure 4.2 The education level of the parents in Ho Chi Minh City – VHLSS 2010 ........ 29

Figure 4.3 The distribution of current English education expenditure in basic education,

total income and total expenditure...................................................................................... 32

Figure 4.4 Histogram graphic of the current payment for English education in Ho Chi

Minh City............................................................................................................................ 33

Figure 4.5 Histogram graphic of the dummy variable of current payment for English

education in Ho Chi Minh City .......................................................................................... 34

Figure 4.6 Household’s total income distribution in Ho Chi Minh City............................ 35

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LIST OF TABLES

Table 3.1 Variable description and expected sign for Model 1.......................................... 26

Table 4.1 The development of number of foreign language center through the years....... 31

Table 4.2 Summary statistic of variables............................................................................ 37

Table 4.3 The relationship of total income and current payment for English education ... 39

Table 4.4 The relationship of household’s total expenditure and current payment for

English education................................................................................................................ 39

Table 4.5 The results of the models.................................................................................... 40

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