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Impact of Remittance on Consumption and Savings Behavior in Rural Areas of Bangladesh

Author

Listed:
  • Mohammed Ziaul Haider

    (Professor, Economics Discipline, Khulna University, Khulna-9208, Bangladesh.)

  • Tanbir Hossain

    (Lecturer, North Western University, Khulna, Bangladesh)

  • Ohidul Islam Siddiqui

    (Professor, ISRT, University of Dhaka, Dhaka, Bangladesh)

Abstract

This study measures the impact of remittance on consumption and savings behavior though surveying rural households in Bangladesh. It uses hypothesis testing to compare consumption and savings behavior and path model analysis to trace out the impact of remittance on household level consumption and savings behavior in rural areas of Bangladesh. The remittance receiver households receive US$ 358 monthly remittance on an average. The average monthly food expenditure, aggregate expenditure and savings of a remittance receiver household are about US $28, $32 and $10 higher than that of a non-receiver household. The path model analysis findings indicate that remittance has a statistically significant positive impact on attributing food and aggregate consumption expenditure in addition to savings. Therefore, this study concludes that remittance plays an important role in attributing consumption and savings behavior in the selected rural areas of the south-west region of Bangladesh. However, further study addressing randomness in the sample selection process with wider sample and study area coverage might enhance the robustness of the study findings.

Suggested Citation

  • Mohammed Ziaul Haider & Tanbir Hossain & Ohidul Islam Siddiqui, 2016. "Impact of Remittance on Consumption and Savings Behavior in Rural Areas of Bangladesh," Journal of Business, LAR Center Press, vol. 1(4), pages 25-34, September.
    • Handle: RePEc:lrc:larjob:v:1:y:2016:i:4:p:25-34
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    References listed on IDEAS

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    1. Hiranya Nath & Khawaja A. Mamun, 2010. "Workers’ Migration and Remittances in Bangladesh," Working Papers 1002, Sam Houston State University, Department of Economics and International Business.
    2. Adams Jr., Richard H. & Cuecuecha, Alfredo, 2010. "Remittances, Household Expenditure and Investment in Guatemala," World Development, Elsevier, vol. 38(11), pages 1626-1641, November.
    3. Barua, Shubhasish & Majumder, Md. Alauddin & Akhtaruzzaman, Dr. Md., 2007. "Determinants of Workers’ Remittances in Bangladesh: An Empirical Study," MPRA Paper 15080, University Library of Munich, Germany.
    4. Rasyad A. Parinduri & Shandre M. Thangavelu, 2008. "Remittance and Migrant Households' Consumption- and Saving Patterns: Evidence from Indonesia," NUBS Malaysia Campus Research Paper Series 2008-02, Nottingham University Business School Malaysia Campus.
    5. Hasan, Mohammad Monirul, 2008. "The macroeconomic determinants of remittances in Bangladesh," MPRA Paper 27744, University Library of Munich, Germany, revised Sep 2010.
    6. Adriana Castaldo & Barry Reilly, 2007. "Do Migrant Remittances Affect the Consumption Patterns of Albanian Households?," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 5(1), pages 25-44.
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    Cited by:

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    2. Rahman, Md. Matiar & Hosan, Shahadat & Karmaker, Shamal Chandra & Chapman, Andrew J. & Saha, Bidyut Baran, 2021. "The effect of remittance on energy consumption: Panel cointegration and dynamic causality analysis for South Asian countries," Energy, Elsevier, vol. 220(C).
    3. Khan, Adnan, 2020. "A Bibliography Search on International Migration and Remittances Literature during the period of 1971-2020: A Case of Bangladesh," MPRA Paper 108143, University Library of Munich, Germany, revised 2020.
    4. Bezon Kumar, 2019. "The Impact of International Remittances on Poverty Alleviation in Bangladesh," Remittances Review, Remittances Review, vol. 4(1), pages 67-86, May.
    5. Sarker Masud & Islam Shahidul, 2018. "Impacts of International Migration on Socio-Economic Development in Bangladesh," European Review of Applied Sociology, Sciendo, vol. 11(16), pages 27-35, June.
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    7. Khan, Adnan & Mrs, Sultana, 2021. "International Remittances Literature: A Study in Bangladesh during the period of 1971-2020," MPRA Paper 108290, University Library of Munich, Germany, revised 2021.

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    More about this item

    Keywords

    Consumption; Household; Remittance; Rural Bangladesh.;
    All these keywords.

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F24 - International Economics - - International Factor Movements and International Business - - - Remittances
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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