This study has provided the first econometric evidence that the loss of land ( due to urbanization and industrialization) has no impact on the probability of a household belonging to a particular income group (poor, middle class or rich) in Hanoi's peri-urban areas, Vietnam. The result also revealed that farmland holding was not statistically correlated with the likelihood of the household being in a given income group. Nevertheless, other factors, including households' education, access to credit, productive assets and notably their nonfarm participation before farmland loss, were found to increase the chances of the households moving up the income ladder.