Remittances and Calorie Consumption Nexus in Algeria
| Date | 01 August 2017 |
| Author | Selçuk Akçay,Alper Karasoy |
| Published date | 01 August 2017 |
| DOI | http://doi.org/10.1111/imig.12348 |
Remittances and Calorie Consumption Nexus
in Algeria
Selcßuk Akcßay* and Alper Karasoy*
ABSTRACT
This study investigates the cointegration and causal relationships between remittances and cal-
orie consumption as an indicator of food security in Algeria. We estimate the calorie demand
function for the period 1970-2008, using two different cointegration tests Johansen and Juselius
(1990) and autoregressive distributed lag (ARDL) bounds testing approach proposed by Pesaran
et al. (2001) and Granger causality test based on Vector Error Correction Model. We find that:
(1) GDP per capita affects calorie consumption positively and significantly; (2) income elasticity
of calorie consumption is 0.16 in the short run and 0.60 in the long run; (3) remittances posi-
tively and significantly influence calorie consumption in the long run; (4) remittance elasticity of
calorie consumption is 0.05 in the long run; (5) based on the causality test remittances influence
calorie consumption directly and indirectly via GDP per capita in the long run.
1. INTRODUCTION
Recent data from the World Bank (2016a) indicates that developing countries received international
remittances equivalent to US$432 billion, which is three times higher than the size of the official
development assistance in 2015. Remittances can have significant macroeconomic effects on the
receiving developing countries. A considerable amount of literature is devoted to investigating the
effects of remittances on macroeconomic and social indicators for the receiving countries (Buch
and Kuckulenz, 2010; McKenzie and Yang, 2015). Few studies, however, have been carried out on
the remittances and food security link (Cuong and Mont, 2012; Fonta et al. 2015; Generoso, 2015;
Isoto and Kraybill, 2017; Lu, 2012; Mergo, 2016; Nguyen and Winters, 2011; Terrelonge, 2014).
Accordingly, in this study, we look at the nexus between remittances and food security. Given its
long history of emigration and consequent remittance inflows, we hypothesize that remittance
inflows might exert a positive impact on calorie consumption in Algeria.
According to World Bank classification, Algeria is an upper-middle-income country, and its
economy depends heavily on oil and natural gas. In North Africa, Algeria is an eminent exporter
of both oil and natural gas. The hydrocarbons make up 30 per cent of GDP, 60 per cent of budget
revenues and 95 per cent of export earnings in Algeria (IMF, 2014). Besides hydrocarbons, despite
their recent decrease, the impact of remittances on Algerian economy is significant. According to
the World Bank (2016b), in 2013, 6.8 per cent of the population, representing 23.9 million, lives
abroad in the Middle East and North Africa and the region received 48.8 billion US$ officially
recorded remittances. Maghreb countries, namely Egypt, Morocco and Algeria, are the major recipi-
ents of the international remittances on the continent of Africa. In 2013, according to World Bank
(2016b), Algeria had 1,784.5 thousand people (4.7% of the population) in the Diaspora and they
* Afyon Kocatepe University, Department of Economics, Turkey
doi: 10.1111/imig.12348
©2017 The Authors
International Migration ©2017 IOM
International Migration Vol. 55 (4) 2017
ISSN 0020-7985Published by John Wiley & Sons Ltd.
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