Impact of remittance on consumption and savings behavior in rural areas of 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. This is an open access article under the terms of the Creative Commons Attribution License 4.0, which allows use, distribution and reproduction in any medium, provided the original work is properly cited.

The Impact of International Remittances on Poverty Alleviation in Bangladesh

“…As the estimated coefficient of the logistic model has no direct economic interpretation, the most preferred way in this regard is to find out the marginal effects (Gujarati and Poter, 2009). The marginal effect of a particular variable expresses the probability estimation of household poverty that means the probability of a household being poor keeping other variables constant.…”

“…A good number of researchers studied remittances in Bangladesh (Kumar et al, 2018;Ahmed et al, 2018;Hasan and Shakur, 2017;Wadood and Hossain, 2016;Regmi and Paudel, 2016;Haider et al, 2016;Bayes et al, 2015;Hatemi-J and Uddin, 2014;Chowdhury, 2014;Masuduzzaman, 2014;Al-Mukit et al, 2013;Khan and Islam, 2013;Raihan et al, 2009). However, most of these studies are either descriptive or not focusing on the link between remittances and poverty.…”

“…Remittances have not only statistically significant impacts on poverty but also on financial development (Masuduzzaman, 2014) and attributing food and aggregate consumption expenditure in addition to savings (Haider et al, 2016). Khan and Islam (2013) showed that a one per cent increase in remittance inflows increases inflation rate by 2.48 per cent in the long run but no effects in the short run.…”

International Remittances Literature: A Study in Bangladesh during the period of 1971-2020

“…Salim 1992;Ahmed 1993;Chowdhury 1992;Ahmad & Zohora 1997;Rahman 1999). Mannan & Farhana 2014a, 2014b, 2014c, 2014dMannan et al 2014;Masuduzzaman 2014;Chowdhury 2015;Pradhan 2015;Mannan & Farhana 2015a, 2015b, 2015cMannan & Fredericks 2015Akter 2016Azam et al 2016;Haider et al 2016;Hassan et 2016;IOM 2010Islam & Rayhan 2016;Majumder 2016;Osmani 2016aOsmani , 2016bRashid 2016;Regmi & Paudel 2016;Taguchi & Lama 2016;Hassan & Shakur 2017;Mahmud 2017Mahmud , 2014Siddiqui 2016Siddiqui , 2004bWadood & Hossain 2017;Ahmed et al 2018;Ghelli 2018;Kumar et al 2018;Sarkar et al 2018;Kumar 2019;Mannan 2017aMannan , 2017bMannan , 2017cMannan , 2016Mannan , 2015Mannan , 2011aMannan , 2011bRahman et al 2020)…”

Women Migrant Workers in Fiqh Perspectives

“…25 The positive side of remittance plays a large role in the family economy and the social-economic cycle of the community. Previous research by the World Bank, 26 Dean Yang, 27 Mohammad Ziaul Haider et al 28 Muktadir-al-Mukit et al, 29 Bezon Kumar, 30 Ambreen Anjum et al 31 Temitayo Olumide Olaniyan, 32 John S. Afaha 33 , Nurlan Kurmanov, et al, 34 Faiza Husnayeni Nahar et al, 35 show that remittances are very positive for the development of families, communities, and countries receiving remittances. The utilization of remittances continues to develop to meet the educational needs of children 36 and buy immovable assets such as land.…”