The remittance-food security dynamics in Jamaica

ABSTRACT

It is an unsettled question whether the impact of remittance inflows (remittances) on food security is positive, negative, or null. We examine this question for Jamaica, the first for such a high remittance-receiving country. To start, we discuss the issues related to food security and remittances. Next, buttressed by theoretical underpinnings , we measure food security as calorie consumption and empirically evaluate how it is impacted by remittances in Jamaica over the period 1976 to 2019. We employ impulse response function analysis and Granger causality testing, within a robust vector error correction modelling framework. There are two key findings. First, we find a cointegrating relationship wherein the impulse analysis indicates that remittances positively impact calorie consumption in the long run, and vice versa. Second, we find that there is bidirectional Granger causality between remittances and calorie consumption. One implication of our findings is that remittances should form part of any broad developmental poverty alleviation polices, given their impact on promoting food security.

KEYWORDS:

• Remittances
• calorie consumption
• Jamaica
• VECM
• causality

JEL CLASSIFICATION:

• F24
• C22

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ We also tested for a unit root assuming (i) no intercept and no trend and (ii) with intercept only. The conclusions from these tests were the same: all variables are integrated of order 1.