Intra-Household Preference Asymmetry
RCTClinical Trial
Migrants and remittance beneficiaries in home countries frequently disagree on how transmitted funds should be allocated across consumption and investment. When migrants lack mechanisms to monitor or enforce spending preferences from afar, overall remittance transfers decline.
Picture this
Imagine a parent living in another city who sends money home specifically wanting it put into a college savings bucket, while the family living back home wants to spend the cash immediately on daily groceries. Because the parent cannot monitor spending at the store, the friction and disagreement make the parent hold back on sending extra money.
What the evidence says
Baseline survey data demonstrates that migrants favor long-term investment (education, housing) while beneficiaries favor immediate consumption; unmonitored preference asymmetry reduces baseline remittances (averaging 1,311 AED per month) below potential capacity.
- Who was studied
- 4,458 Filipino migrant workers in Dubai and Sharjah, UAE, paired with recipient households in the Philippines.
- How
- Randomized controlled trial and baseline survey elicitation comparing migrant spending preferences with recipient household expenditure patterns.
What to do
Elicit and compare sender and recipient spending priorities prior to financial product deployment to identify structural alignment gaps in cross-border transfers.
From the source
"Migrants' preferences on how remittances should be spent often differ from the beneficiaries' preferences. Migrants often have a stronger preference that remittances be used for purposes that may have general development benefits in the long run, such as investment (in physical or human capital) or savings."
A Field Experiment among Filipino Migrant Workers in the UAE