The Impact of Remittances on Household Consumption Pattern In Indonesia

Mirdad, Ade Jamal and Rusliana, Nanang The Impact of Remittances on Household Consumption Pattern In Indonesia. The Impact of Remittances on Household Consumption Pattern In Indonesia.

Text SJBMS 4(4) 366-371.pdf Download (642kB)

Abstract

Using household data from Indonesian Family Live Survey (IFLS), this paper assesses how remittances affects consumption pattern in recipient household remittances. Using the Last Square Dummy Variable (LSDV), the estimation results presented that the consumption responses to remittances is greater than the wage and earning profit. The effect of remittances on food is smaller than non-food, education spending, health spending and housing spending. Remittance is a type of transitory income that will have an impact on economic development through the formation of human capital. That remittance is the type of income which most responded by consumption. The effect of remittances is greater on non�food consumption compared to food consumption. Keywords: Remittance, Consumption and Economic Development, Indonesian Family Live Survey

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