Digital financial transaction adoption and household income components in rural Vietnam

This study examines the association between Digital Financial Transaction (DFT) adoption and the income components of rural households in Vietnam, using data from 2,028 households in the Thailand - Vietnam Socio-Economic Panel. To address potential selection bias arising from households’ self-selection into DFT adoption, the analysis employs propensity score matching and inverse probability weighting. The results indicate that DFT adoption is positively associated with total household income, with particularly large positive associations for wage income and non-farm self-employment income, while no statistically significant association is observed for farm income in the aggregate sample. Subgroup estimates reveal different patterns by ethnicity and education, including positive associations between DFT adoption and farm income among ethnic-minority households. Because the data are cross-sectional and do not contain mediating variables, these results should be interpreted as associations and do not establish causal effects or the mechanisms underlying the observed differences. The findings provide micro-level evidence relevant to targeted rural financial-inclusion policies; any relevance to the Sustainable Development Goals (SDGs) is indirect rather than evidence of SDG achievement.