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Modeling and Measuring Information Asymmetry in the Context of Senegalese Migrants' Remittances

Author

Listed:
  • Marlon Seror

    () (Paris School of Economics, Ecole Normale Superieure and UMR DIAL IRD Paris)

Abstract

Much optimism has been invested in the developmental role of migrants’ remittances as altruism and frequent interactions should facilitate investments by migrants in their countries of origin. But geographical dispersion can foster strategic behavior. We develop a model of transfers from the Senegalese diaspora based on socio– anthropological evidence of remittances earmarked by migrants for investments or expenditures by their households of origin, especially durable assets. The model allows for information asymmetry and monitoring by the migrant. It shows that it may be optimal for recipients to behave strategically and we may observe systematic discrepancies between recipients’ and senders’ reports of the goods to be financed by transfers. Novel matched data enable us to test and find support for the model’s predictions.

Suggested Citation

  • Marlon Seror, 2015. "Modeling and Measuring Information Asymmetry in the Context of Senegalese Migrants' Remittances," Working Papers DT/2015/23, DIAL (Développement, Institutions et Mondialisation).
  • Handle: RePEc:dia:wpaper:dt201523
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Asymmetric Information; International migration; Remittances; Senegal;

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances

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