The impact of remittances on consumption in Ghana

Abstract

This thesis examines the impact of remittances on consumption and consumption patterns in Ghana using the 2012/2013 household survey data. It also analyzes the factors that affect the probability of receiving remittances in Ghana and the relationship between remittances and consumption. Using ordinary least square regression, the study finds a significantly positive relationship between remittances and consumption on food housing in Ghana. This paper confirms that remittances increase household consumption particularly consumption on food, non-food, housing, and education in Ghana, showing that households spend 76 pesewas and 42 pesewas of each GHS1 of their remittances on housing and food respectively. It also used the logistic model and found that male household heads are more likely to receive remittances as compared to the female household head. Households in urban areas are more likely to receive remittances as compared to households that are in rural areas. Measures need to be taken to reduce the cost of remitting to and within the country in order to increase the total consumption on households.