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Sharing Norm Pressures and Community Remittances: Evidence from a Natural Disaster in the Pacific Islands

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Migrants are often subject to social pressures to remit beyond their own households, to share the benefits of migration with the wider community in their home country; these are ‘community remittances’. We hypothesize that community sharing norm pressures are stronger in locations with more extensive home-community networks. We also postulate that the responsiveness of remittances to sharing pressures is subject to diminishing returns, attributable to a donor fatigue effect. Using customized survey data from three Polynesian migrant groups in metropolitan and regional Australia, we estimate double-hurdle regression models of community remittances. To identify the effects of sharing norm pressures we exploit an exogenous (cyclone) shock to home country incomes affecting one sub-group. We find strong evidence in support of the postulated responsiveness of community remittances to location-related differences in sharing norm pressures, and the presence of a donor fatigue effect. The policy implications are discussed.

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Paper provided by School of Economics, University of Queensland, Australia in its series Discussion Papers Series with number 471.

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Date of creation: 01 Oct 2012
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Handle: RePEc:qld:uq2004:471

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  1. Laurence R. Iannaccone, 1998. "Introduction to the Economics of Religion," Journal of Economic Literature, American Economic Association, vol. 36(3), pages 1465-1495, September.
  2. Mathias Sinning, 2007. "Determinants of Savings and Remittances – Empirical Evidence from Immigrants to Germany," Ruhr Economic Papers 0023, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  3. Stefano DellaVigna & John A. List & Ulrike Malmendier, 2009. "Testing for Altruism and Social Pressure in Charitable Giving," NBER Working Papers 15629, National Bureau of Economic Research, Inc.
  4. Catherine Eckel & Philip J. Grossman & Angela Milano, 2007. "Is More Information Always Better? An Experimental Study of Charitable Giving and Hurrican Katrina," Southern Economic Journal, Southern Economic Association, vol. 74(2), pages 388-411, October.
  5. Christopher R. Udry & Esther Duflo, 2004. "Intrahousehold Resource Allocation in Cote D'Ivoire: Social Norms, Separate Accounts and Consumption Choices," Yale School of Management Working Papers ysm407, Yale School of Management.
  6. Vadean, Florin P. & DeVoretz, Don J., 2007. "Social relations and remittances: Evidence from Canadian micro data," HWWI Research Papers 3-6, Hamburg Institute of International Economics (HWWI).
  7. Richard Adams, 2011. "Evaluating the Economic Impact of International Remittances On Developing Countries Using Household Surveys: A Literature Review," Journal of Development Studies, Taylor & Francis Journals, vol. 47(6), pages 809-828.
  8. Garcia, Jaume & Labeaga, Jose M, 1996. "Alternative Approaches to Modelling Zero Expenditure: An Application to Spanish Demand for Tobacco," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 489-506, August.
  9. Richard Brown & Eliana Jimenez, 2011. "Subjectively-assessed Welfare and International Remittances: Evidence from Tonga," Journal of Development Studies, Taylor & Francis Journals, vol. 47(6), pages 829-845.
  10. Laurence R. Iannaccone, 1998. "Corrigenda [Introduction to the Economics of Religion]," Journal of Economic Literature, American Economic Association, vol. 36(4), pages 1941-1941, December.
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