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 behaviour though surveying rural households in 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.