Do Off-Farm Employment and Remittances Affect Food Consumption Patterns? Evidence from Albania

Abstract

This study is the first to analyze the combined effects of off-farm incomes from a variety of sources—local wage employment, local self-employment, and migrant remittances—on detailed food consumption patterns. A food demand model that incorporates incomes from different sources and household demographics is developed to fit rural Albanian household data. Findings indicate that increases in off-farm wage income increases food consumed at-home and away-from-home. Cereal-based staples consumed at home increase with increased off-farm wage income and decrease with increased remittances. Food consumption patterns are not affected by self-employment income. Findings have implications for improving dietary conditions in rural households.

Keywords:

• income elasticities
• nonlinear Engel curves
• off-farm income
• remittances
• rural Albania

JEL Classifications:

• D12
• D13

DISCLOSURE STATEMENT

No potential conflict of interest was reported by the authors.

Notes

1. One of the key measures of nutrition and food security is calorie or nutrition intake, which is linked to food expenditures.

2. In the survey datasets used for this study, the mountain administrative region vastly encompasses the northern region of Albania, including the Albania Alps.

3. We use the modified OECD equivalence scales, which is available at http://www.oecd.org/eco/growth/OECD-Note-EquivalenceScales.pdf.

4. Quiñones et al. (2009) reports the methodology in creating the RIGA database and how to address missing off-farm income values.

5. See Wouterse and Taylor (2008) and Wouterse (2012) for a formal treatment of the agricultural household model.

6. The nonparametric curves were fitted by using the “lpoly” command in Stata (i.e., kernel-weighted local polynomial smoothing). A Gaussian kernel is used with the bandwidth selection chosen according to a rule of thumb, following Fan and Gijbels (1996, pp. 66–68).

7. Results of the nonparametric estimation are available upon request from the authors.

8. Note that urbanization may also be related to local off-farm wage employment income; farm households located in more urbanized districts may face a higher probability of finding wage employment. However, we found this instrument to be insignificant in explaining off-farm wage employment income of rural Albanian households. Similarly, urbanization may also be related to remittance receipts, since the degree of rurality (i.e., the proportion of district resident population aged 15–64 years in 2001) may be a result of migration in previous years and could be positively related to remittance receipts. However, similar to Miluka et al. (2010), we did not find this to be a significant instrument to explain remittances received by rural Albanian households.

9. We thank an anonymous reviewer for pointing this out.

Additional information

Notes on contributors

Ayuba Seidu

Ayuba Seidu is an Assistant Professor of Applied Economics in the Department of Economics and the Agricultural Economics Programat California State University, Stanislaus, Turlock, California.

Gülcan Önel

Gülcan Önel is an Assistant Professor of Economics, Food and Resource Economics Department, Institute of Food and Agricultural Sciences at the University of Florida, Gainesville, Florida, USA.

Charles B. Moss

Charles B. Moss is a Professor of Agricultural Economics in the Department of Food and Resource Economics at the University of Florida, Gainesville, Florida, USA.

James L. Seale

James L. Seale is a Professor of Agricultural Economics in the Department of Food and Resource Economics at the University of Florida, Gainesville, Florida, USA.