Studies on Household Consumption Expenditure and Remittances in Nigeria

Abstract

The study examined the impact of remittances on household consumption expenditure in Nigeria. The study was based on expo facto design through utilising secondary data sourced from World Development Indicators and the CBN’s Statistical Bulletin. The Auto Regressive Distributed Lag (ARDL) technique was employed to analyze both short- and long-term dynamics. The ARDL bound test showed a long-run relationship among the variables. The long-run and short-run coefficients indicated that remittances positively and significantly influenced household consumption expenditure. The implication of the findings is that there will be significant improvements in the short-term and long-term consumption patterns of households who receive remittances in Nigeria as compared to those who do not. Based on the findings, it was recommended that more focus should be placed on the future benefits that can be obtained from remittances rather than on short-term gains. This is because when focus is placed on long-term gains, remittances can serve as an avenue for poverty reduction, through providing a stable source of livelihood to households.