Prospect Theory and Migrant Remittance Decision Making

33 Pages Posted: 5 Sep 2012

See all articles by Kwaku K. Opong

Kwaku K. Opong

University of Glasgow - Adam Smith Business School

Date Written: August 10, 2012

Abstract

Foreign migrant remittances are a growing phenomenon in international financial flows yet are barely mentioned in discussions in international finance. The growth in migrant remittances to the developing world in the past decade amounted to $332 billion in 2010 and is forecast to reach $467 billion in 2014. A number of economic and ethical theories have been suggested in the literature to explain migrant remittance decisions. This paper argues that prospect theory offers a better understanding of migrant remittance decisions than the current theories in the extant literature.

Keywords: prospect theory, migrant remittances, loss averse, frame of reference

JEL Classification: D64, F22, F24, G15

Suggested Citation

Opong, Kwaku K., Prospect Theory and Migrant Remittance Decision Making (August 10, 2012). Available at SSRN: https://ssrn.com/abstract=2127615 or http://dx.doi.org/10.2139/ssrn.2127615

Kwaku K. Opong (Contact Author)

University of Glasgow - Adam Smith Business School ( email )

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Glasgow, Scotland G12 8QQ
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