Minh Thi Nguyen

Food safety is as much of a concern to Vietnamese citizens as it is to the public authorities. As safe vegetables are classified as credence goods, the markets of which exhibit a high level of information asymmetry between the buyers and the suppliers. As such, making the market for safe vegetables become more transparent and grow sustainably is a must, but not an easy task. In this paper, we use a Kernel regression method to discover the main determinants of consumers’ decisions for the consumption of “safe” vegetables with more focus on perceived levels of trust. The result shows that apart from other traditional factors, perceived trust is an important determinant of consumers’ decisions. However, the data shows that consumers put more trust in un-verified factors such as “store’s reputation” or “label” and much less on formal factors such as “government certificates”. This result raises some alarm as other studies show that without trusted involvement from the Government, signals from suppliers, such as labeling are not reliable.

This paper uses special features of Vietnam's health insurance system to separately estimate the effects of moral hazard and adverse selection. Traditionally, the estimation of those effects is ad hoc due to the endogeneity of insurance status. Due to a special fact in Vietnam that there exist a great deal of people who are under the compulsory scheme but get no insurances, we are able to estimate the effects of moral hazard and adverse selection using a matching estimator technique. Our results show that with outpatient services, moral hazard and adverse selection are very severe in Vietnam for old people, and not for young people; and that for inpatient service, the effects are insignificant. The results can be used in the construction of the health insurance policy for Vietnam toward universal insurance as stated in the Law of Health Insurance 2008.