Date Published:
Jun 01, 2007
Category:
Discussion Papers
Focus Area(s):
Author(s):
Code:
DP 2007-18

This paper examines the general relationship between remittances and household expenditures in the Philippines by doing a cross-sectional analysis of the 2003 Family Income and Expenditure Survey (FIES). Unlike past research works, it provides a comprehensive overview of the effect of remittance on spending behavior by looking not only at common categories like food, education, and housing but also vices like tobacco and alcohol. It addresses some methodological issues in examining remittance effects. These are the presence of zero expenditures, heterogeneity of the nationally representative sample, and inaccuracy of the FIES data on remittance. Zero expenditures were taken into account by using the censored Tobit model while heterogeneity was addressed by employing the Quantile Regression technique. Also, the FIES data on remittances was corrected by excluding the investment and pension components from the original remittance data used by past studies to arrive at more accurate estimate of remittances sent by family members working abroad and its effects. The study found that while there are evidences that households receiving remittances tend to consume more conspicuously on consumer items, they also invest more on education, housing, medical care, and durable goods. There is no clear relationship though between remittances and tobacco and alcohol.

Citations

This publication has been cited 14 times

In other Publications
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  2. Barrios, Erniel B. and Christian D. Mina. 2009. Profiling poverty with multivariate adaptive regression splines. Discussion Papers DP 2009-29. Philippine Institute for Development Studies.
  3. Barrios, Erniel B. and Christian D. Mina. 2013. Profiling poverty with multivariate adaptive regression splines. Philippine Journal of Development PJD 2010, 37, no. 2d. Philippine Institute for Development Studies.
  4. Berloffa, Gabriella and Sara Giunti. 2017. Remittances and healthcare consumption: human capital investment or responses to shocks? Evidence from Peru. DEM Working Papers 2017/12. Department of Economics and Management.
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  6. Kuntsevych, Iuliia. 2017. Remittances in Ukraine using household data. CERGE-EI Working Papers wp590. The Center for Economic Research and Graduate Education - Economics Institute, Prague.
  7. Kuntsevych, Iuliia. 2017. Remittances, spending and political instability in Ukraine. CERGE-EI Working Papers wp583. The Center for Economic Research and Graduate Education - Economics Institute, Prague.
  8. McDonald, James Ted and M. Rebecca Valenzuela. 2009. The impact of skill mismatch among migrants on remittance behaviour. Social and Economic Dimensions of an Aging Population Research Papers 242. McMaster University.
  9. Racelis, Rachel H., Michael R.M. Abrigo, and J.M. Ian Salas. 2015. Financing consumption over the lifecycle and overseas workers’ remittances: Findings from the 1999 and 2007 Philippine national transfer accounts. The Journal of the Economics of Ageing, 5(C), 69-78. Elsevier.
  10. Randazzo, Teresa and Matloob Piracha. 2019. Remittances and household expenditure behaviour: Evidence from Senegal. Economic Modelling, 79(C), 141-153. Elsevier.
  11. Randazzo, Teresa and Matloob Piracha. 2014. Remittances and household expenditure behaviour in Senegal. IZA Discussion Papers 8106. Institute of Labor Economics (IZA).
  12. Thapa, Sridhar and Sanjaya Acharya. 2017. Remittances and household expenditure in Nepal: Evidence from cross-section data. Economies, 5, no. 2, 1-17. MDPI.
  13. Yap, Josef T.. 2008. Managing capital flows: The case of the Philippines. Development Economics Working Papers 22703. East Asian Bureau of Economic Research.
  14. Yap, Josef T. . 2010. Managing capital flows: The case of the Philippines. Managing Capital Flows, chapter 13. Edward Elgar Publishing.


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