The Effects of afta on Macroeconomic Variables and Poverty: Evidence of Laos

6.4.3  Household income 

Change in per capita income is used as the welfare indicator in this study. Household income 

includes agriculture, non-agriculture business, waged income, and expenditure on own-

produced agricultural products. Own-produced consumption represents a large portion of 

household consumption and to neglect this area of income would be to underestimate 

household income. New income in the simulation is calculated by adding the estimated gain 

to income in the baseline (as in Chen and Ravallion, 2004).