LAUSR

This paper examines the role of remittances in the livelihoods of households in developing countries. Previous studies have shown that remittances are mostly utilized for investment in estates, agricultural inputs or education; however, remittances may also be useful for smoothing consumption by poor rural households. Hence, we estimated the differences in consumption patterns for macronutrients and micronutrients between remittance recipients and non-recipients using data from Kilimanjaro, Tanzania. An instrumental variable strategy was adopted in econometric estimations of nutrient consumption to address issues of self-selection and endogeneity of net income and remittances. Furthermore, the instrumental variable quantile regression method was used to estimate the distributional effects of remittances. A major finding was that remittances increased investment in intake of nutrients such as proteins, vitamin A, vitamin C and calcium; these are nutrients that are vitally important for physical development of children and for improving the health of adults. Remittances did not have a significant effect on consumption of macronutrients such as carbohydrates and fats, or total calories.