Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/329443 
Year of Publication: 
2025
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 13 [Issue:] 6 [Article No.:] 163 [Year:] 2025 [Pages:] 1-23
Publisher: 
MDPI, Basel
Abstract: 
Foreign remittances have become a crucial component of the Nepalese economy. This study investigates the impact of remittances on household consumption patterns in rural Nepal using data from the World Bank's Nepal Household Risk and Vulnerability (NHRV) Survey Panel, covering the period from 2016 to 2018. Employing an instrumental variable regression approach, we estimate the elasticity of remittances to various consumption categories. Our findings indicate that foreign remittances significantly affect total consumption expenditure. Disaggregated results reveal that remittances positively influence spending on food items and non-food categories such as education and healthcare, highlighting their role in enhancing nutrition and human capital development. However, remittances do not contribute to unproductive expenditures like tobacco, alcohol, or rituals. Therefore, other things remaining the same, remittance is enhancing welfare in rural Nepali households.
Subjects: 
remittance
consumption expenditure
rural Nepal
JEL: 
J31
J51
C21
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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