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International Remittances and Household Expenditures : The Philippine Case

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  • Aubrey D. Tabuga

    (PIDS)

Abstract

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 addressed 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.

Suggested Citation

  • Aubrey D. Tabuga, 2007. "International Remittances and Household Expenditures : The Philippine Case," Development Economics Working Papers 22698, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:develo:22698
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    Cited by:

    1. Racelis, Rachel H. & Abrigo, Michael R.M. & Salas, J.M. Ian, 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, Elsevier, vol. 5(C), pages 69-78.
    2. Iuliia Kuntsevych, 2017. "Remittances in Ukraine Using Household Data," CERGE-EI Working Papers wp590, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    3. Adelowokan, Oluwaseyi & Adesoye, Adesola & Akpa, Emeka & Maku, Olukayode, 2020. "Remittances, Foreign Aid and Private Consumption in Sub-Saharan Africa (SSA): A System GMM Estimation," MPRA Paper 98362, University Library of Munich, Germany.
    4. Sridhar Thapa & Sanjaya Acharya, 2017. "Remittances and Household Expenditure in Nepal: Evidence from Cross-Section Data," Economies, MDPI, vol. 5(2), pages 1-17, May.
    5. Barrios, Erniel B. & Mina, Christian D., 2009. "Profiling Poverty with Multivariate Adaptive Regression Splines," Discussion Papers DP 2009-29, Philippine Institute for Development Studies.
    6. Francisco, Kris A. & Tanaka, Makoto, 2019. "Does public infrastructure affect human capital? The effect of improved transport connectivity on children's education in the Philippines," Economics of Education Review, Elsevier, vol. 73(C).
    7. Josef T. Yap, 2010. "Managing Capital Flows: The Case of the Philippines," Chapters, in: Masahiro Kawai & Mario B. Lamberte (ed.), Managing Capital Flows, chapter 13, Edward Elgar Publishing.
    8. Randazzo, Teresa & Piracha, Matloob, 2014. "Remittances and Household Expenditure Behaviour in Senegal," IZA Discussion Papers 8106, Institute of Labor Economics (IZA).
    9. Randazzo, Teresa & Piracha, Matloob, 2019. "Remittances and household expenditure behaviour: Evidence from Senegal∗," Economic Modelling, Elsevier, vol. 79(C), pages 141-153.
    10. Gabriella Berloffa & 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.
    11. Bożena, Chrząstowska, 2019. "Labour Migration and Remittances in Eurasia," MPRA Paper 106628, University Library of Munich, Germany, revised 2019.
    12. Iuliia Kuntsevych, 2017. "Remittances, Spending and Political Instability in Ukraine," CERGE-EI Working Papers wp583, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    13. James Ted McDonald & 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.
    14. Josef T. Yap, 2008. "Managing Capital Flows : The Case of the Philippines," Development Economics Working Papers 22703, East Asian Bureau of Economic Research.

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    More about this item

    Keywords

    remittances; remittance income effect; household expenditures/spending; quantile regression analysis;
    All these keywords.

    JEL classification:

    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D10 - Microeconomics - - Household Behavior - - - General

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