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To remit, or not to remit: that is the question. A remittance field experiment

Author

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  • Torero, Maximo
  • Viceisza, Angelino

Abstract

We conduct a remittance field experiment among Salvadoran migrants in the metro DC area. Migrants need to decide whether or not to remit funds to a recipient in El Salvador and if so how much. We maintain a (2x2) design in which the remittance budget has a value of $400 or $200, and the remitted funds arrive as cash or grocery vouchers that are non-transferable and applicable to basic necessities that do not include alcohol and cigarettes. Each migrant is randomly allocated to one of the resulting four treatments. We test across these treatments whether control over remittance spending in the form of grocery vouchers affects remittance behavior. We find the following. Our quantitative findings suggest that migrants prefer a remittance to arrive as cash than as groceries when stakes are high. This result is robust to inclusion of a wide set of covariates and is consistent with a conceptual framework in which migrants have preferences over how recipients spend remittances. Our qualitative findings suggest that migrants integrate amounts sent in the experiment with the external environment for sending remittances. We explore the mechanisms underlying the main effect and find that migrants who more recently sent a remittance and, in certain specifications, male migrants exhibit a greater preference for cash. Some implications of our findings are discussed.

Suggested Citation

  • Torero, Maximo & Viceisza, Angelino, 2014. "To remit, or not to remit: that is the question. A remittance field experiment," MPRA Paper 61786, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:61786
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Chabé-Ferret, Bastien & Machado, Joël & Wahba, Jackline, 2018. "Remigration intentions and migrants' behavior," Regional Science and Urban Economics, Elsevier, vol. 68(C), pages 56-72.
    2. Batista, Catia & Silverman, Dan & Yang, Dean, 2015. "Directed giving: Evidence from an inter-household transfer experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 118(C), pages 2-21.
    3. Kate Ambler & Diego Aycinena & Dean Yang, 2015. "Channeling Remittances to Education: A Field Experiment among Migrants from El Salvador," American Economic Journal: Applied Economics, American Economic Association, vol. 7(2), pages 207-232, April.
    4. Bastien Chabé-Ferret & Joël Machado & Jackline Wahba, 2016. "Return Plans and Migrants' Behavior," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2016016, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    5. 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).
    6. Dean Yang, 2011. "Migrant Remittances," Journal of Economic Perspectives, American Economic Association, vol. 25(3), pages 129-152, Summer.
    7. Mehdi Chowdhury & Dragana Radicic, 2018. "Remittances and asset accumulation in Bangladesh: A study using generalized propensity score," Discussion Papers 2018-05, University of Nottingham, CREDIT.
    8. Ambler, Kate, 2013. "Don’t tell on me: Experimental evidence of asymmetric information in transnational households:," IFPRI discussion papers 1312, International Food Policy Research Institute (IFPRI).

    More about this item

    Keywords

    remittance; field experiment; remittance spending; El Salvador;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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