The Impact of International Remittances on Expenditure Patterns of Urban Households in Ethiopia

Kokeb G. Gebregziabher ()
Additional contact information
Kokeb G. Gebregziabher: Addis Ababa University

Chapter Chapter 6 in Poverty and Well-Being in East Africa, 2016, pp 117-137 from Springer

Abstract: Abstract This study sheds light on the effect that international remittances have on expenditure patterns of urban households in Ethiopia. It makes use of primary household survey data collected in 2013 from four major urban areas—Addis Ababa, Gonder, Hawassa, and Mekelle. It uses the Working-Lesser model based on Engle’s curve to ascertain the objectives. The study finds that households which receive remittances from abroad spend, on average and ceteris paribus, a higher share of their budgets on investment-type goods such as education, health, and housing and a lower share of their budgets on food compared to households which do not receive remittances. Moreover, looking at the effect of international remittances on marginal spending behavior, households which receive no remittances have higher marginal propensity to consume food items but low marginal propensity to consume investment-type goods compared to those who receive international remittances. Thus, the evidence from this study suggests that the inflow of international remittances to Ethiopia is affecting household expenditure behavior across several consumption goods. Hence, to use these as a tool to fight poverty in Ethiopia remittances should be channeled toward investments rather than toward consumption.

Keywords: Migration; Remittances; Household expenditure; Engle’s curve; Ethiopia (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:esichp:978-3-319-30981-1_6

Ordering information: This item can be ordered from
http://www.springer.com/9783319309811

DOI: 10.1007/978-3-319-30981-1_6

Access Statistics for this chapter

More chapters in Economic Studies in Inequality, Social Exclusion, and Well-Being from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().