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Garbage In, Gospel Out? Controlling for the Underreporting of Remittances

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  • Tigran A. Melkonyan
  • David A. Grigorian
  • J. Scott Shonkwiler

Abstract

Empirical studies that use self-reported data on remittances to measure the latter's impact on microeconomic incentives mostly ignore the potential errors associated with reporting/measurement issues. An econometric procedure to control for these errors is developed and applied to household-level data from Armenia. We find evidence of systematic under-reporting of remittances. After controlling for this, we find a strong negative impact of remittances on incentives to work.

Suggested Citation

  • Tigran A. Melkonyan & David A. Grigorian & J. Scott Shonkwiler, 2008. "Garbage In, Gospel Out? Controlling for the Underreporting of Remittances," IMF Working Papers 08/230, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:08/230
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    Keywords

    Financial incentives; Economic models; Armenia; Data collection; Labor supply; Workers remittances; censored data; measurement error; remittances; migration; equation; remittance; survey;

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