Do migrant remittances affect the consumption patterns of Albanian households?

Part of : SEEJE ; Vol.5, No.1, 2007, pages 25-54

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Pages:
25-54
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Abstract:
This paper investigates the extent to which consumption patterns of Albanian households are affected by the receipt of migrant remittances. Domestic and international remittances are considered and differences in their impacts on household consumption patterns assessed. The study finds that the consumption pattern for households in receipt of internal remittances is not statistically different from those that do not receive such transfers. On the other hand, households who receive remittances from abroad spend, on average and ceteris paribus, a lower share of their expenditure on food and a higher share on consumer durables compared to households who do not receive any type of migrant remittances. However, in terms of the impact of remittances on marginal spending behaviour, even international remittances do not seem to play a substantial role, in contrast to the evidence reported in other recent studies in this area of research. This may be due to the fact that the remittance variable that we use is failing to capture all households who are receiving remittances, or may reflect that in Albania both domestic and international remittances only have a modest effect on consumption patterns of households.
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Keywords:
migrant remittances, household consumption, Engel curves
Notes:
Περιέχει πίνακες, σημειώσεις, παράρτημα και βιβλιογραφία, The research for this paper was conducted as part of the project ‘Migration and the Poverty Transition in Albania’ for the Development Research Centre on Migration, Globalisation and Poverty. The authors are grateful to an anonymous referee of this journal, Richard Black, Russell King, Benjamin Davis, Alberto Zezza, Rachel-Sabates Wheeler, Gero Carletto and Meera Warrier for useful and constructive comments. We also thank participants at the workshops ‘Poverty, Vulnerability and Migration Choice’ (Geneva, 18-19 May 2006) and ‘Labour Migration: a Solution or an Obstacle for Development’ (Cluj Napoca, 10-12 Nov 2006) for helpful suggestions. However, in all cases the usual disclaimer applies., JEL Classification: D12