Modeling and Measuring Information Asymmetry in the Context of Senegalese Migrants' Remittances

Marlon Seror

No DT/2015/23, Working Papers from DIAL (Développement, Institutions et Mondialisation)

Abstract: Much optimism has been invested in the developmental role of migrants’ remittances as altruism and frequent interactions should facilitate investments by migrants in their countries of origin. But geographical dispersion can foster strategic behavior. We develop a model of transfers from the Senegalese diaspora based on socio– anthropological evidence of remittances earmarked by migrants for investments or expenditures by their households of origin, especially durable assets. The model allows for information asymmetry and monitoring by the migrant. It shows that it may be optimal for recipients to behave strategically and we may observe systematic discrepancies between recipients’ and senders’ reports of the goods to be financed by transfers. Novel matched data enable us to test and find support for the model’s predictions.

Keywords: Asymmetric Information; International migration; Remittances; Senegal (search for similar items in EconPapers)
JEL-codes: D82 F22 F24 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2015-12
New Economics Papers: this item is included in nep-mig
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Persistent link: https://EconPapers.repec.org/RePEc:dia:wpaper:dt201523

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