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International Remittances and Household Expenditures: the Philippine Case


  • Tabuga, Aubrey D.


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 addresses 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

  • Tabuga, Aubrey D., 2007. "International Remittances and Household Expenditures: the Philippine Case," Discussion Papers DP 2007-18, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:dpaper:dp_2007-18

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    References listed on IDEAS

    1. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521845731, December.
    2. Shefrin, Hersh M & Thaler, Richard H, 1988. "The Behavioral Life-Cycle Hypothesis," Economic Inquiry, Western Economic Association International, vol. 26(4), pages 609-643, October.
    3. Edgar R. Rodriguez, 1996. "International Migrants' Remittances in the Philippines," Canadian Journal of Economics, Canadian Economics Association, vol. 29(s1), pages 427-432, April.
    4. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, March.
    5. Edgard R. Rodriguez & Susan Horton, 1995. "International Return Migration and Remittances in the Philippines," Working Papers horton-95-01, University of Toronto, Department of Economics.
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    Cited by:

    1. repec:eee:joecag:v:5:y:2015:i:c:p:69-78 is not listed on IDEAS
    2. Junaid Ahmed & Mazhar Mughal, 2014. "How do consumption patterns of foreign and domestic remittance recipients and non recipients compare? Evidence from Pakistan," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 160, Courant Research Centre PEG.
    3. Barrios, Erniel B. & Mina, Christian D., 2009. "Profiling Poverty with Multivariate Adaptive Regression Splines," Discussion Papers DP 2009-29, Philippine Institute for Development Studies.
    4. Josef T. Yap, 2010. "Managing Capital Flows: The Case of the Philippines," Chapters,in: Managing Capital Flows, chapter 13 Edward Elgar Publishing.
    5. 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.
    6. 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.
    7. Randazzo, Teresa & Piracha, Matloob, 2014. "Remittances and Household Expenditure Behaviour in Senegal," IZA Discussion Papers 8106, Institute for the Study of Labor (IZA).
    8. 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.


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