Social relations and remittances

The utility function is weakly separable into the commodity groups (A) and (B) if: the partial substitution elasticities between different commodities of the group (A) and of the group (B) are identical, i.e. [...] Thus, it is reasonable to run the analysis with the pooled sample.17 Homogeneity and symmetry One of the tasks of this empirical analysis is to test if the restrictions implied by utility theory hold for the demand equations when including the unique expenditure items relating to remittances. [...] By running separate OLS regressions, the hypothesis of homogeneity cannot be rejected in six out of ten equations in the system for the Canadian-born population, seven out of ten equations for the South and East European immigrant population, and eight out of ten equations for the North American and West European and Asian immigrant population. [...] Therefore, we include in the LA/AIDS estimates for the Asian group only two equations (one for the share of remittances to persons and one for the share of remittances to charities) and total remittances as an independent argument (instead of total expenditures). [...] These simulations are depicted in the Figures 2 and 3 and are build on the reported estimates for remittances to persons and to charities in Appendix C. In short, for each representative household we place the mean values for all the model’s variables (except age) and cross multiply by the relevant coefficients.