Estudios Fronterizos (Dec 2015)
Remittances as expenditure drivers in rural Mexico
Abstract
In this work we present different empirical specifications to test for the impact of domestic and international remittances on expenditure patterns in rural Mexican households. Using data from the National Survey of Household Income and Expenditure from 1998 to 2012 we develop an econometric approach that deal with censoring on various expenditure categories while controlling for remittances at the household level. Our findings indicate that there is evidence of significant effects of internal and external remittances on household expenditure patterns; these income sources are not fungible and reshape household demands in ways that are independent of total income. Effects on each expenditure category are different for each type of remittance income. Internal remittances seem to stimulate more categories related to human development investments, health and education, while external remittances do it with physical capital investments.
