Others authors, such as Vu (2020), used Deaton’s method in comparison with alternative methods to deal with quality effects. One popular alternative is the one of Cox and Wohlgenant (1986) (CW), which is based on fewer assumptions and it is easier to use compared with Deaton’s (e.g. Park et al., 1996; Lazaridis, 2003). CW uses the deviations of unit values from regional or seasonal means as proxies of quality effects. They regress them on household characteristics and use the residulas to correct unit values, obtaining quality-adjusted prices. However, the main issue with CW is that the adjusted prices are household-specific, disregarding the fact that, in theory, nearby households share similar market prices. In order to fix this problem, Vu (2009) developed a modified version of CW using communal average unit values instead of household unit values. This modified CW is used by Vu (2020) and many others (see below), however neither CW nor its modified version deals with measurement error problems.

Mergenthaler et al. (2009) used the CW approach to analyze fresh fruits and vegetables demand in the two major cities of Vietnam, Hanoi and Ho Chi Minh City. Instead of the VHLSS, they used their own survey data collected in 2005, looking at effects of different supply chains with different quality and safety standards. They conclude that fruits and vegetables from modern supply chains with higher standards, such as supermarkets or non-traditional imports, are highly income elastic, and that income effects are prevalent over price competitiveness and supermarket penetration, suggesting once again that the effects of Vietnamese economic growth affect consumption preferences, not only in terms of quantity consumed but also in terms of food quality. Hoang (2018) used the modified CW approach (Vu, 2009) in QUAIDS concluding that, despite the growing income and urbanization levels in Vietnam, the demand for rice is still expenditure and price inelastic with respect to other foods. Moreover, Hoang (2018) shows that a 10% decrease in income or a 30% increase in rice prices would induce Vietnamese households to revert a larger portion of expenditure on rice away from other foods. This suggests that despite the economic growth, in Vietnam rice remains a core staple for housheolds’ food security.

Despite the availability of methods to (partially) address quality effects, some studies still employed market prices without quality correction. Meyerhoefer et al. (2007) studied the relationship between the demand for health care and the consumption of food, non-food goods, and leisure using the VHLSS 1997 and market data at the commune level with LAIDS in Vietnam. Their results suggest that, overall, Vietnamese consumption patterns are not strongly influenced by changes in health care costs, unless the household is directly affected by illness and some of the members are under treatment. On the contrary, the demand for health care is responsive to changes in income and in the prices of rice and non-food goods. Le (2008) used market prices to analyze the demand for rice, other food, meat and fish, but with the advantage of using prices collected with the Community Price Survey conducted by the GSO in parallel to the VLSS 2004.

A more direct approch to separate the quality from the quantity effect of price changes is the unrestricted method (UM) proposed by McKelvey (2011). This direct approach is seldom adopted because it requires both price and unit value data. Apart from McKelvey (2011), published applications of this direct approach are Gibson and Kim (2013a), Gibson and Romeo (2017) and Gibson and Kim (2019). The UM uses the relationship between unit values and actual prices to directly estimate the magnitude of quality substitution. McKelvey (2011) demonstrates that quality substitution can induce biased price elasticities even when prices are actually observed.

Gibson and Kim (2013a) provide an application of the UM for Vietnam, estimating a demand system with eight food groups and data from the VHLSS 2010. They demonstrate that price elasticities estimated with approaches that do not allow for quality substitution are overestimated because quality demand response is attributed to quantity response. This has significant repercussions on food security assessments. Gibson and Kim (2013a) show that, when ignoring quality substitution, a 10% increase in the relative price of rice wrongly results in a 4% drop in household calories consumption, while the actual reduction in calorie consumption is less than 2% when quality substitution is accounted for. This because Vietnamese households have considerable room to switch to lower quality rice before having to reduce the calories intake (assuming that different quality rices have the same nutritional value and that different quality varieties are available on the market). For the same reasons, Gibson and Kim 7