aikyam school

Intra-Household Information Asymmetry

Migrants making financial allocations remotely may alter their remitting decisions depending on whether their choice environment and total available resources are transparently disclosed to recipient households. Fearing recipient backlash or damaged trust, senders might withhold or adjust earmarked transfers.

Picture this

Think of choosing how much allowance to send a family member from a bonus prize. If the family member knows the exact size of the bonus prize, they might expect a larger cut or resent restrictions; if the bonus size is private, the sender can set conditions without facing social pressure or conflict.

What the evidence says

Varying information asymmetry produced no statistically significant differences in total remittances across information settings (e.g., p = 0.127 for equality of labeling impacts across information conditions).

Who
N = 501 Filipino migrants in Rome randomly allocated into 3 experimental groups (Private Information N = 167, Information Sharing N = 167, Social Excuse N = 167).
How
Randomized controlled trial altering information disclosure to recipient households in the Philippines regarding migrant decision options and windfall amounts.

What to do

Deploy targeted remittance commitment options without requiring complex private-information structures or social excuse justifications for senders.

From the source

"We randomly vary the information asymmetry between migrants and their most closely connected household, but find no significant change in the remittance response to these forms of commitment as information varies."

Directing remittances to education with soft and hard commitments: Evidence from a lab-in-the-field experiment and new product take-up among Filipino migrants in Rome

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