The Economic and Social Impacts of Migration on Brand Expenditure: Evidence from Rural India

Abstract

Households that send members to work away from home often receive information about the lifestyles and consumption behaviors in those migration destinations (i.e., social remittances) along with money or goods (i.e., economic remittances). The authors investigate the effect of having a migrant household member on household brand expenditures in rural India, a market characterized by substantial consumption of unbranded products. They collect and analyze household-level survey data from 434 households across 30 villages using an instrumental variable strategy. Economic remittances result in greater brand expenditure, and this level is higher for poorer households. After controlling for economic remittances, the authors find that the effect of migration on brand expenditures is more positive for households in more populous villages, with greater access to mobile phones, lower viewership of television media, and less recently departed migrants. They demonstrate how marketing resource allocation across villages can be improved by incorporating migration data and provide insights for household targeting in the context of door-to-door selling in villages. The results are robust to alternative, public policy–based instruments and can be generalized to expenditure on private schools. Using additional survey data from 300 households in 62 new villages, the authors replicate the results by comparing within-households brand expenditures before and after the migration event.