An Empirical Examination of the Factors Affecting Remittance by Mexican Migrants in the United States

Mexico has reported workers remittances to equal $16.6 billion in 2004, which constitutes nearly 2.5 percent of Mexicos GDP, exceeding the inflows from direct foreign investment and aid. We develop a model of remittances based on a net income concept. The model is used to generate a series of testable hypotheses. We test these hypotheses using what we term a type II generalized ordered probit model based on survey data for Mexican Migrants. Our results are generally consistent with standard utility maximization theory, and more specifically are consistent with a net income hypothesis. we find, for example, that migrant income is a strong positive determinant of remittance levels except for the lowest remittance category. We also find that migrants remit more when they have more family members in Mexico and fewer in the U.S., when they own land and real estate in Mexico, and when they plan on returning to Mexico relatively soon.Labor and Human Capital,

The check is in the mail: Household characteristics and migrant remittance from the U.S. to Mexico

We develop a household model of migrant remittance that accounts for the effects of subsistence requirements and transaction costs on remittances. The model supports testable hypotheses about the effect on remittances of migrant income, family composition and distribution, transaction costs, income and residence security, and other household characteristics on remittance levels and frequency. We test these hypotheses using survey data on individual Mexican migrants in the United States. The results are broadly consistent with our hypotheses. For example, our subsistence requirement implies that below a threshold, the income effect on remittance is zero. This is borne out in our results.remittances, migrant income, transaction costs

The check is in the mail: Household characteristics and migrant remittance from the U.S. to Mexico

We develop a household model of migrant remittance that accounts for the effects of transaction costs on remittances. The model supports testable hypotheses about the effect on remittances of migrant income, family composition and distribution, transaction costs, income and residence security, and other household characteristics on remittance levels and frequency. We test these hypotheses using survey data on individual Mexican migrants in the United States. The results are broadly consistent with our hypotheses.remittances, migrant income, transaction costs

Purchasing power parity in African countries: evidence from panel SURADF test

This study reexamines the validity of long-run purchasing power parity (PPP) hypothesis using a battery of panel unit root tests for 11 developing countries in Africa over the period 1980-2007. Based on the conventional panel unit root tests, we found evidence that the monthly real exchange rates in these countries were mean reverting. By contrast, the series-specific unit root test proposed by Breuer et al. (SURADF) reveals that only six of the 11 RERs series were stationary using the US dollar as reference currency. Additionally, our results reveal that there is stronger evidence of the parity condition with the Rand-based rates than in the other currency-based rates like the US dollar or Euro.We conclude that PPP holds in some, but not all, of the African countries according to the SURADF tests

Production from an Exhaustible Resource Under Government Control in an LDC

This paper investigates production from an exhaustible resource when the objective is to maximize the total value of output retained within the domestic economy rather than profit maximization. Maximization of retained value is more relevant in less developed countries and governments have in certain cases purchased a controlling share in extractive industries in order to produce at levels that are optimal under this objective. The conclusion of the paper is that optimal output will be higher than under profit maximization, and the larger the value of output going to domestic inputs, the larger the output differential in output.Center for Research on Economic Development, University of Michiganhttp://deepblue.lib.umich.edu/bitstream/2027.42/100892/1/ECON343.pd

An Empirical Examination of the Factors Affecting Remittance by Mexican Migrants in the United States

Mexico has reported worker's remittances to equal $16.6 billion in 2004, which constitutes nearly 2.5 percent of Mexico's GDP, exceeding the inflows from direct foreign investment and aid. We develop a model of remittances based on a net income concept. The model is used to generate a series of testable hypotheses. We test these hypotheses using what we term a type II generalized ordered probit model based on survey data for Mexican Migrants. Our results are generally consistent with standard utility maximization theory, and more specifically are consistent with a net income hypothesis. we find, for example, that migrant income is a strong positive determinant of remittance levels except for the lowest remittance category. We also find that migrants remit more when they have more family members in Mexico and fewer in the U.S., when they own land and real estate in Mexico, and when they plan on returning to Mexico relatively soon