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Role of Remittances on Households’ Expenditure Pattern in India

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  • Parida, Jajati Keshari
  • Mohanty, Sanjay K.

Abstract

Using the unit data from the National Sample Survey (64th round, 2007-08), this paper examine the effect of remittances on the marginal spending behavior of households in India. Majority of the households reported that they spent remittances on food items, clothing bedding and foot wears, healthcare and educating the household members and on durable goods etc. The share of expenditure on difference heads with respect to receipts of remittance, however, suggests that households receiving remittances spend 2 per cent less at the margin on food articles compared to households those who do not receive remittances. Further, households receiving remittances spend more at the margin on education (12 per cent), clothing and bedding & foot wears (1.5 per cent) and durable consumer goods (6 per cent), compared to those who do not receive any remittance. These findings support the theoretical argument that remittances help to increase the level of investment in human and physical capital and play an important role in raising the standard of living of the households.

Suggested Citation

  • Parida, Jajati Keshari & Mohanty, Sanjay K., 2013. "Role of Remittances on Households’ Expenditure Pattern in India," MPRA Paper 62395, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:62395
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    File URL: https://mpra.ub.uni-muenchen.de/62395/2/MPRA_paper_62395.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Remittance and Households Expenditure;

    JEL classification:

    • R2 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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