The Role of Remittances in Household Spending in Rural Nepal
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 t...
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| Format: | Article |
| Language: | English |
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MDPI AG
2025-06-01
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| Series: | Economies |
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| Online Access: | https://www.mdpi.com/2227-7099/13/6/163 |
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| author | Resham Thapa-Parajuli Tilak Kshetri Sanjit Singh Thapa |
| author_facet | Resham Thapa-Parajuli Tilak Kshetri Sanjit Singh Thapa |
| author_sort | Resham Thapa-Parajuli |
| collection | DOAJ |
| description | 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. |
| format | Article |
| id | doaj-art-ed089dcaab824ec1bea3fcb24b204061 |
| institution | Kabale University |
| issn | 2227-7099 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Economies |
| spelling | doaj-art-ed089dcaab824ec1bea3fcb24b2040612025-08-20T03:26:52ZengMDPI AGEconomies2227-70992025-06-0113616310.3390/economies13060163The Role of Remittances in Household Spending in Rural NepalResham Thapa-Parajuli0Tilak Kshetri1Sanjit Singh Thapa2Central Department of Economics, Tribhuvan University, Kathmandu 44600, NepalCentral Department of Economics, Tribhuvan University, Kathmandu 44600, NepalCollege of Business, University of Nebraska-Lincoln, Lincoln, NE 68588, USAForeign 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.https://www.mdpi.com/2227-7099/13/6/163remittanceconsumption expenditurerural Nepal |
| spellingShingle | Resham Thapa-Parajuli Tilak Kshetri Sanjit Singh Thapa The Role of Remittances in Household Spending in Rural Nepal Economies remittance consumption expenditure rural Nepal |
| title | The Role of Remittances in Household Spending in Rural Nepal |
| title_full | The Role of Remittances in Household Spending in Rural Nepal |
| title_fullStr | The Role of Remittances in Household Spending in Rural Nepal |
| title_full_unstemmed | The Role of Remittances in Household Spending in Rural Nepal |
| title_short | The Role of Remittances in Household Spending in Rural Nepal |
| title_sort | role of remittances in household spending in rural nepal |
| topic | remittance consumption expenditure rural Nepal |
| url | https://www.mdpi.com/2227-7099/13/6/163 |
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