Remittance Responses to Temporary Discounts: A Field Experiment Among Central American Migrants

42 Pages Posted: 30 Sep 2014

See all articles by Kate Ambler

Kate Ambler

International Food Policy Research Institute (IFPRI)

Diego Aycinena

Universidad del Rosario

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy; National Bureau of Economic Research (NBER); University of Michigan at Ann Arbor - Department of Economics

Date Written: September 2014

Abstract

We study the impacts on remittances of offering migrants temporary discounts on remittance transaction fees. We randomly assigned migrants from El Salvador and Guatemala 10-week remittance transaction fee discounts, and assess impacts using administrative transaction data and a post-experiment survey. Temporary discounts lead to substantial increases in the number of transactions and total amount remitted during the discount period. Surprisingly, these increases persist up to 20 weeks after expiration of the discount. We find no evidence that the discounts cause migrants to shift remittances from other remittance channels, or to send remittances on behalf of other migrants. These findings are consistent with naïveté on the part of migrants regarding remittance recipients' reference-dependent preferences.

Suggested Citation

Ambler, Kate and Aycinena, Diego and Yang, Dean, Remittance Responses to Temporary Discounts: A Field Experiment Among Central American Migrants (September 2014). NBER Working Paper No. w20522. Available at SSRN: https://ssrn.com/abstract=2502684

Kate Ambler (Contact Author)

International Food Policy Research Institute (IFPRI) ( email )

1201 Eye St, NW,
Washington, DC 20005
United States

Diego Aycinena

Universidad del Rosario ( email )

Calle 12C No. 4-59,
Oficina #312
Bogotá, Bogotá, DC
Colombia
(+57 1) 2970200 ext. 4907 (Phone)

Dean Yang

University of Michigan at Ann Arbor - Gerald R. Ford School of Public Policy ( email )

440 Lorch Hall
611 Tappan Street
Ann Arbor, MI 48109
United States
734-764-6158 (Phone)

HOME PAGE: http://www.umich.edu/~deanyang/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

University of Michigan at Ann Arbor - Department of Economics

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

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