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Endogeneity and sample selection in a model for remittances

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  • Giulia BETTIN

    ()
    (Universita' Politecnica delle Marche, Dipartimento di Economia)

  • Riccardo LUCCHETTI

    ()
    (Universita' Politecnica delle Marche, Dipartimento di Economia)

  • Alberto ZAZZARO

    ()
    (Universita' Politecnica delle Marche, Dipartimento di Economia)

Abstract

We estimate a remittance model in which we address endogeneity and reverse causality relationships between remittances, pre-transfer income and consumption. In order to take into account the fact that a large share of individuals do not remit, instrumental variable variants of the double-hurdle and Heckit selection models are proposed and estimated by Limited Information Maximum Likelihood (LIML). Our results for a sample of recent immigrants to Australia show that endogeneity is substantial and that estimates obtained by the methods previously employed in the literature may be very misleading if given a behavioural interpretation.

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Bibliographic Info

Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 361.

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Length: 39
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:anc:wpaper:361

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Keywords: migration; remittances; selection models;

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References

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Citations

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Cited by:
  1. Giulia Bettin & Riccardo Lucchetti & Alberto Zazzaro, 2011. "Financial development and remittances: micro-econometric evidence," Mo.Fi.R. Working Papers 56, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  2. Elena AMBROSETTI & Eralba CELA & Tineke FOKKEMA, 2011. "The Remittances Behaviour of the Second Generation in Europe: Altruism or Self-Interest?," Working Papers 368, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  3. Giulia Bettin & Riccardo Lucchetti, 2012. "Intertemporal remittance behaviour by immigrants in Germany," Mo.Fi.R. Working Papers 75, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  4. Giulia Bettin & Andrea Filippo Presbitero & Nikola Spatafora, 2014. "Remittances and vulnerability in developing countries," Mo.Fi.R. Working Papers 93, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.
  5. Riccardo LUCCHETTI & Claudia PIGINI, 2014. "A simple and effective misspecification test for the double-hurdle model," Working Papers 397, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  6. Kaczmarczyk, Pawel, 2013. "Money for Nothing? Ukrainian Immigrants in Poland and their Remitting Behaviors," IZA Discussion Papers 7666, Institute for the Study of Labor (IZA).
  7. Eralba CELA & Tineke FOKKEMA & Elena AMBROSETTI, 2012. "Links Between Transnationalism Integration and Duration of Residence: The Case of eastern European Migrants in Italy," Working Papers 386, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.

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