Using a novel dataset from a 2010 household survey, this study has provided the first
econometric evidence of the impacts of farmland loss (due to urbanization and
industrialization) on total household income and its sources in Hanoi's sub-urban areas,
Vietnam. It was found that the loss of farmland had a positive impact on nonfarm income and
other income but a negative impact on farm income. More importantly, the results showed
that farmland loss had no negative effect on total household income. The above findings
suggest that under the impacts of land loss, households have actively participated in nonfarm
activities in order to supplement their income with nonfarm incomes, which in turn might
have compensated for the loss of farm income due to land loss. Therefore, the loss of farmland
should not be considered as an absolutately negative factor as it can help households improve
their income by motivating them to change their livelihoods towards nonfarm activities.