Wednesday, July 20, 2011

22 July 2011: Remittances and Rashomon

Randall Akee
Tufts University and
Devesh Kapur
University of Pennsylvania

The paper examines the massive discrepancies on remittance data among
different data sources. Utilizing a novel data set on remittance data
for India that matches household surveys to administrative bank data,
we investigate the differences in self-reported and actual deposits to
Non-Resident Indian (NRI) accounts. There is a striking difference
between the perceived and actual frequency and amount of deposits to
NRI accounts. Our results indicate the presence of non-classical
measurement error in the reporting of remittances in the form of
deposits to NRI accounts. As a consequence, regression analyses using
remittances as an explanatory variable may contain large upward biases
instead of the usual attenuation of results under classical
measurement error. Instrumental variables estimates are no better; the
estimated coefficients from these regressions are more than three
times the size of the OLS regression results. We also find that
measurement error has macroeconomic consequences as well; estimates of
total aggregate remittances differ by an order of magnitude between
administrative and self-reported remittances. We conclude with some
questions about NSS and BOP data.

Date: July 22, 2011
Time: 11:30 A.M.

Seminar Room 2, New Building
Indian Statistical Institute Delhi Centre,
7, S. J. S. Sansanwal Marg,
New Delhi-110016 (INDIA)


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