Philippine Standard time

International Remittances and Household Expenditures: the Philippine Case

DP 2007-18
2007

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 time(s).

  1. 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" , Elsevier

  2. Barrios, Erniel B. and Christian D. Mina, 2009 "Profiling poverty with multivariate adaptive regression splines" , Philippine Institute for Development Studies

  3. Thapa, Sridhar and Sanjaya Acharya, 2017 "Remittances and household expenditure in Nepal: Evidence from cross-section data" , MDPI

  4. Adelowokan, Oluwaseyi et. al, 2020 "Remittances, foreign aid and private consumption in Sub-Saharan Africa (SSA): A system GMM estimation" , University Library of Munich, Germany

  5. Barrios, Erniel B. and Christian D. Mina, 2013 "Profiling poverty with multivariate adaptive regression splines" , Philippine Institute for Development Studies

  6. Francisco, Kris A. and Makoto Tanaka, 2019 "Does public infrastructure affect human capital? The effect of improved transport connectivity on children's education in the Philippines" , Elsevier

  7. Yap, Josef T. , 2010 "Managing capital flows: The case of the Philippines" , Edward Elgar Publishing

  8. Randazzo, Teresa and Matloob Piracha, 2019 "Remittances and household expenditure behaviour: Evidence from Senegal" , Elsevier

  9. McDonald, James Ted and M. Rebecca Valenzuela, 2009 "The impact of skill mismatch among migrants on remittance behaviour" , McMaster University

  10. Kuntsevych, Iuliia, 2017 "Remittances in Ukraine using household data" , The Center for Economic Research and Graduate Education - Economics Institute, Prague

  11. Randazzo, Teresa and Matloob Piracha, 2014 "Remittances and household expenditure behaviour in Senegal" , Institute of Labor Economics (IZA)

  12. Berloffa, Gabriella and Sara Giunti, 2017 "Remittances and healthcare consumption: human capital investment or responses to shocks? Evidence from Peru" , Department of Economics and Management

  13. Kuntsevych, Iuliia, 2017 "Remittances, spending and political instability in Ukraine" , The Center for Economic Research and Graduate Education - Economics Institute, Prague

  14. Yap, Josef T., 2008 "Managing capital flows: The case of the Philippines" , East Asian Bureau of Economic Research


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Contributor
Philippine Institute for Development Studies
Authors
Tabuga, Aubrey D.
Keywords
remittances; remittance income effect; household expenditures/spending; quantile regression analysis
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