Impact of Remittances on Household Consumption: An Empirical Analysis of Countries in Sub-Saharan Africa

This article analyzes how remittances impact household consumption expenditures in 18 Sub-Saharan African Countries (SSA) spanning from 1980 to 2019. Since the prime objective of this study is to ascertain the long-run and short-run relations between remittances and consumptions, a panel autoregressive distributed lag (PARDL) model is adopted. The empirical results show that remittances impact consumption positively in the long run and in the short run, but they are statistically insignificant. For the robustness check, a panel causality test, developed by Dumitrescu and Hurlin, is conducted. The results show no causal relationship between remittances and consumptions.