IMF-交易成本如何影響匯款（英）-2022.11-43正式版

HowDoTransactionCostsInfluenceRemittances?KangniKpodarandPatrickAmirImamWP/22/218IMFWorkingPapersdescriberesearchinprogressbytheauthor(s)andarepublishedtoelicitcommentsandtoencouragedebate.TheviewsexpressedinIMFWorkingPapersarethoseoftheauthor(s)anddonotnecessarilyrepresenttheviewsoftheIMF,itsExecutiveBoard,orIMFmanagement.2022NOV?2022InternationalMonetaryFundWP/22/218IMFWorkingPaperStrategy,PolicyandReviewDepartmentandInstituteforCapacityDevelopmentHowDoTransactionCostsInfluenceRemittances?PreparedbyKangniKpodarandPatrickAmirImam*AuthorizedfordistributionbyJohannesWiegandNovember2022IMFWorkingPapersdescriberesearchinprogressbytheauthor(s)andarepublishedtoelicitcommentsandtoencouragedebate.TheviewsexpressedinIMFWorkingPapersarethoseoftheauthor(s)anddonotnecessarilyrepresenttheviewsoftheIMF,itsExecutiveBoard,orIMFmanagement.ABSTRACT:Usinganewquarterlypaneldatabaseonremittances(71countriesovertheperiod2011Q1-2020Q4),thispaperinvestigatestheelasticityofremittancestotransactioncostsinahighfrequencyanddynamicsetting.Itaddstotheliteraturebysystematicallyexploringtheheterogeneityinthecost-elasticityofremittancesalongseveralcountrycharacteristics.Thefindingssuggestthatcostreductionshaveashort-termpositiveimpactonremittances,thatdissipatesbeyondonequarter.Accordingtoourestimates,reducingtransactioncoststotheSustainableDevelopmentGoaltargetof3percentcouldgenerateanadditionalUS$32bninremittances,higherthatthedirectcostsavingsfromlowertransactioncosts,thussuggestinganabsoluteelasticitygreaterthanone.Amongremittancecost-mitigationfactors,highercompetitionintheremittancemarket,adeeperfinancialsector,andadequatecorrespondentbankingrelationshipsareassociatedwithalowerelasticityofremittancetotransactioncosts.Similarly,remittancecost-adaptationfactorssuchasenhancedtransparencyinremittancecosts,improvedfinancialliteraryandhigherICTdevelopmentcoincidewithremittancesbeinglesssensitivetotransactioncosts.Supplementingthepanelanalysis,theuseofmicrodatafromtheUSA-Mexicocorridorconfirmthatmigrantsfacinghighertransactioncoststendtoremitless,andthatthiseffectislesspronouncedforskilledmigrantsandthosethathaveaccesstoabankaccount.JELClassificationNumbers:Keywords:D23,F24,F32Remittances;

TransactionCosts;

Elasticity;

Migrationpimam@;kkpodar@Author’sE-MailAddress:*Kpodar:InternationalMonetaryFundandFERDI;Imam:InternationalMonetaryFund.ThispaperbenefitedfrominsightfulcommentsandsuggestionsfromCarineMeyimdjui,CedricOkou,BaopingShangandAzarSultanov.ThisresearchispartoftheMacroeconomicResearchinLow-IncomeCountriesproject(ProjectID:60925)supportedbytheUK’sForeign,CommonwealthandDevelopmentOffice(FCDO).TheviewsexpressedinthispaperarethoseoftheauthorsanddonotnecessarilyrepresenttheviewsoftheInternationalMonetaryFund(IMF),orFCDO.WORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?PreparedbyKangniKpodarandPatrickAmirImamIMFWORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?ContentsI.INTRODUCTION4II.DATAANDEMPIRICALSTRATEGY7CostofRemittancesandRemittanceFlowData7StylizedFactsonRemittanceCosts8TheModelandEconometricApproach12A.B.C.III.THERESULTS13HowElasticAreRemittancestoTransactionCosts?13ExplainingHeterogeneitiesintheCostElasticityofRemittances16ExaminingtheResponseofRemittancestoTransactionCost:EvidencefromMicroDatafromtheA.B.C.US-MexicoCorridor25IV.Conclusion29References38FIGURES1.Averagefeeasashareofa$200USDremittance(2011Q1-2020Q4)(percent)82.ChangeinAveragefeefora$200USDremittance(2016Q1-2020Q1)(percent)93.TrendsinAveragefeefora$200USDremittanceandInterestRateSpread(2011-20)(percent)104.Averagefeefora$200USDremittancebyTypeofProvider(2011Q1-2020Q4)(percent)115.RemittancesFlowsandAveragefeefora$200USDremittance(2011Q1-2020Q4)116.Cost-ElasticityofRemittances:LocalProjections157.Cost-ElasticityofRemittanceswithRespecttoCompetitionintheRemittanceMarket188.Cost-ElasticityofRemittancesinCountrieswithLowandHighFinancialDevelopment199.Cost-ElasticityofRemittancesandCorrespondentbankingrelationships2010.Cost-ElasticityofRemittancesandPriceTransparency2111.Cost-ElasticityofRemittancesandEducationlevel2212.Cost-ElasticityofRemittancesandICTDevelopment2413.Cost-ElasticityofRemittancesandICTAffordability25TABLES1.TransactionCostsandRemittances:Fixed-EffectEstimates142.TransactionCostsandRemittancesintheUS-MexicoCorridor273.TransactionCostsandRemittancesintheUS-MexicoCorridor:TheRoleofFinancialLiteracy284.TransactionCostsandRemittancesintheUS-MexicoCorridor:InstrumentalVariableApproach29ANNEXES1.SampleComposition312.SummaryStatisticsandCorrelationMatrix32INTERNATIONALMONETARYFUND2IMFWORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?ANNEXTABLES1.Cost-ElasticityofRemittances:LocalProjections332.First-StageRegression34ANNEXFIGURES1.ChangeCost-ElasticityofRemittances:InstrumentalVariableLocalProjections342.Cost-ElasticityofRemittances:LowvsHighTransactionCost353.Cost-ElasticityofRemittanceswithrespecttotheGeographicalCoverageofFinancialInstitution…………..354.Cost-ElasticityofRemittanceswithrespecttoAccesstoDepositAccounts365.Cost-ElasticityofRemittancesandICTAccess366.Cost-ElasticityofRemittancesandICTUse377.Cost-ElasticityofRemittancesandICTCapability37INTERNATIONALMONETARYFUND3IMFWORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?INTRODUCTIONRemittancesmatterfordevelopment.Theyareakeysourceoffundingfordevelopingcountries.Migrantssendpartoftheirearningstofamilymemberstoprovidethemwithbasicsubsistence,buildandinvestintheeconomybackhome.AccordingtoWorldBankdata,remittancestolow-andmiddle-incomecountriesmorethandoubledduringthepast15yearstoreachUS$550billionin2021.Overhalfofitgoestopeopleinruralareas,andabout75percentisusedtocoverbasicssuchasfoodandmedicalorschoolexpenses,whiletheremainingisinvestedinassetsorsaved(IFAD,2021).Beingamajorsourceofincomeforthepooresthouseholds,policymakersinadvancedanddevelopingcountriesarelookingatavenuestoencourageremittanceflowstogrowevenfurther.However,amajorstumblingblockinsendingmoneyhomeisthehigh,somewouldargueexcessive,transactioncostsinvolved.Despitethecommitmentsfromtheinternationalcommunitytoreducethecostofremittances,andtheinclusionofthe3percentcosttargetintheSustainableDevelopmentGoals(SDGs),progresshasbeenslowinrecentyears.1ThestrongresilienceofremittancesduringtheCovid-19pandemichasbroughtbacktotheforefrontthedebatesurroundingthestubbornlyhightransactioncosts(seeKpodaretal.,2021).Itisacceptedwisdomthatindividualssendingmoneyhomeinmanypartsoftheworld,particularlysub-SaharanAfrica,arepayingaveryhighcost,whichmaydissuadefurtherflows.Consideringfees,exchangeratemarginandothercosts,between5and15percentofremittancesare“l(fā)ost”duetohightransactioncosts,dependingonthecountryandtheamountssendhome(Ratha,2021).Becauseformalremittancesinvolvehighfixedcostsandhenceareexpensivetoprovide,low-incomeindividualsrefrainfromremitting,orareincentivizedtousecheaperinformalalternatives(Gibson,McKenzieandRohorua,2006;Yang,2011).Againstthisbackdrop,thispaperattemptstoaddressthefollowingquestions:howelasticareremittancestochangesintransactioncosts?whatarethefactorsorpolicyinterventionsthatmayhelpexplaincross-countrydifferencesinthecostelasticityofremittances?Thispaperisrelatedtoseveralstrandsoftheliterature.First,alargebodyofworklooksattheimpactofremittancesatthemacroeconomicandmicroeconomiclevel.Manystudiesfindthatremittancesstimulategrowth,althoughnobroadconsensusexistsyetonthatmatter(seeCazachevicia,Havraneka,andHorvath,2020,forarecentdiscussion).Thisfavorableimpactbuildsonthepremisethatremittancesareanimportantsourceofdevelopmentfinancing,asignificantsourceofinternationalreserves,andoftenarrivecountercyclically.Atthemicro-level,remittancesrespondtoincomeshortfallsand,inthatway,havethepotentialtosmoothhouseholds’income,therebyreducingriskstothefamily(ChoiandYang,2007).Remittancesarealsolinkedtoimprovedeconomic,healthandeducationoutcomesaswellashigherfinancialinclusion.However,therearealsopotentiallysomedeleteriouseffectsobservableatthemacro-level(Chami,Fullenkamp,andJahjah,2003).BesidesproducingDutchDisease-typeeffects,potentiallyreducingthequalityofinstitutions,ordelayingneededfiscaladjustment,remittances1TheSDGsincludetheobjectiveto“by2030,reducetolessthan3percentthetransactioncostsofmigrantremittancesandeliminateremittancecorridorswithcostshigherthan5percent”(SDG10.C).INTERNATIONALMONETARYFUND4IMFWORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?mayalsocomplicatethemonetarytransmissionmechanism,makingmonetarypolicyharder.Thereisalsoevidencethatremittancesmaybreeddependencybydiscouragingreceivinghouseholdmembersfromworking,possiblytrappingcountriesintoanemiclong-rungrowth(seeAmuedo-Dorantes,2014,forasummary).Second,anarrowsetofstudiesinvestigatethedeterminantsofremittancetransactioncosts.Forinstance,FreundandSpatafora(2008)usecross-countrydatafor66countriesandfindthatrecordedremittancesdependpositivelyonstocksofmigrantsandnegativelyontransactioncostsandexchangeraterestrictions.Transactioncostsarealsolowerwhenfinancialsystemsaremoredeveloped,andexchangeratesarelessvolatile.Similarly,BeckandMartinezPeria(2011)conclude,basedonadatasetcovering119countrycorridors,thatthesizeofthemigrantpopulation,bankingcompetitionandlowerbarrierstoaccessbankingservicesareconducivetolowerremittancecosts.Morerecently,Beck,Janfils,andKpodar(2022)exploitaricherremittancecostdatasettoshowthatcost-andrisk-basedconstraintsaswellasmarketstructurehinderaffordableremittancetransactioncosts.Corridorandfirm-specificanalysisrevealsthathigherincomepercapita,easiergeographicalaccesstofinancialinstitutions,largerremittancemarket,shorterdistancebetweensendingandreceivingcountries,competitionintheremittancemarket,andpeggedexchangerateregimeareassociatedwithlowertransactioncosts.Inthesamevein,daSilvaFilho(2021)underscoresthatthedriversofremittancecostsaremultipleandcomplex,withregulatoryissues(suchasexclusivityclauses,stringentAML/CFTregulation,andrestrictivelicensing),alackofpricetransparency,highernumberofbanksandathinremittancemarketbeinglikelytohaveadetrimentaleffectonremittancecosts.Third,thereareseveralselectedstudiesfocusingonthecostelasticityofremittances.Theserangefromcross-countryandpanelstudies(e.g.;FreundandSpatafora,2008,Ahmed,Mughal,andMartínez-Zarzoso,2021)tocountry-specificstudies(FerrianiandOddo,2019,onmigrantsinItaly;KosseandVermeulen,2014,onmigrantsintheNetherlands;Kakhkharova,Akimovb,andRohdeb(2017)onmigrantsinRussia;AhmedandMartínez-Zarzoso,2016,onmigrantsfromPakistan;andGibson,McKenzie,andRohorua(2006)onmigrantsfromTonga).Overall,thesestudiesdocumentasignificantandnegativeeffectoftransactioncostsonremittanceinflows,partlyduetohightransactioncostsencouraginginformalremittances.Nevertheless,thesestudiesdonotgobeyondthecostelasticityestimatetoinvestigatehowthisvariesacrosscountrieswithdifferentcharacteristics.Inthispaper,weimproveonexistingstudiesalongseveraldimensions.First,weexploitanewquarterlydatabaseonremittances,allowingustoinvestigatetheelasticityofremittancestocostwithhighfrequencydatainadynamicsettingusinglocalprojections(Jorda,2005).Assuch,thispapershedslightontheshort-andmedium-termimpactofashocktotransactioncostsonremittancesandhowpersistentthiseffectmightbe.Second,unlikepreviousstudies,thispaperundertakesasystematicanalysisoffactorsthatcanshapethecostelasticityofremittances.Itisimportanttonotethatwearenottakingaviewonwhetherhavingalow-costelasticitytoremittancesisgood—alowelasticityimplieslessreductioninremittanceflowswhentransactioncostsincrease,butalsolowerincreaseinremittancesoccurswhentransactioncostsarereduced.Butthereasontofocusonelasticitiesisthatalowerelasticitywillimplythatfewerremittancesflowinformally.Twobroadcategoriesoffactors/policiesareconsidered:(i)cost-mitigationINTERNATIONALMONETARYFUND5IMFWORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?policiesthatdirectlytackletherootcausesofhighremittancecosts(e.g.policiestopromotecompetitionintheremittancemarket,fosterfinancialsectordevelopment,andsafeguardcorrespondentbankingrelationships)and(ii)cost-adaptationpoliciesthatdonotprimarilyaddressthecostofremittances,butpromotemoreefficientremittancechoices(e.g.policiestoenhancepricetransparency,financialliteraryandinformationandcommunicationtechnologies(ICT)development).Third,thispaperusesmicrodatafromtheUSA-Mexicocorridortoascertainthecostelasticityofremittancesanditsheterogeneitywithrespecttofinancialliteracy,thusprovidingmoregranularresultstosupporttheevidencefoundatthemacrolevel.StudyingtheUSA-Mexicocorridorisinterestingfromseveralstandpoints.Itisthelargestcorridorintheword;hasseveralremittanceserviceproviderswithalargearrayofproducts;andhasin-depthpubliclyavailabledata.Withasamplecovering71countriesovertheperiod2011Q1-2020Q4,thefindingssuggestthata10percentreductionintransactioncostsleadstoa0.9percentincreaseinremittancesinthefirstquarteraftertheshock,withtheimpactbecomingstatisticallyinsignificantfromzeroinsubsequentquarters,implyingthattheresponseofremittancestotransactioncostsisessentiallyofashort-termnature.Thisresultsuggeststhatmovingfromthe2020leveloftransactioncosts(6.3percent)totheSDGtargetof3percentwillgenerateanadditionalUS$32billioninremittances,muchlargerthanthedirectcostsavings.Therefore,migrantswouldnotonlyfullypassonthecostsavingstotheirfamilies,butalsosendmore,implyinganabsoluteelasticityhigherthanone.Theresultsarerobusttoaninstrumentalvariableapproach.Ininvestigatingthecost-mitigationandadaptationfactors,thispaperfindsthatincountrieswherecompetitionintheremittancemarketishigh,thefinancialsystemisdeveloped,andtieswithcorrespondentbanksholdsup,theelasticityofremittancetotransactioncostsismuchlowerthanotherwise.Thisindicatesthatremittancesarelesssensitivetotransactioncostswherealternativeinformalchannelstotherepatriationofmoneyexist.Likewise,lessopaqueremittancetransactioncosts,improvedfinancialliteraryandhigherICTdevelopment(alongitsmultipledimensions:ICTuse,access,capabilityandaffordability)helpexplainwhysomecountriesmayhavealowercost-elasticityofremittances.Finally,evidencefromtheUSA-Mexicocorridor,usinganannualsurveyoftheBankofMexicoduring2013-2017andcoveringover37,000individuals,confirmsthatmigrantswhofacehighertransactioncoststendtoremitless,evenaftercontrollingforsocio-economiccharacteristics.Moreimportantly,educationleveloraccesstoabankaccount,aproxyoffinancialliteracy,mitigatethecost-elasticityofremittances,consistentwiththefindingsfromthepaneldata.Thepaperisstructuredasfollows.SectionIIpresentsdataandsomestylizedfactsonremittancesandtransactioncostsandlaysouttheempiricalmodelandmethodologyemployed.SectionIIIdiscussesthekeyresultsofthepaper,withadditionalfindingsrelegatedtotheannexes,whileSectionIVconcludeswithsomepolicyrecommendations.INTERNATIONALMONETARYFUND6IMFWORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?DATAANDEMPIRICALSTRATEGYA.CostofRemittancesandRemittanceFlowDataThekeysourceofremittancecostdataisthe“RemittancePricesWorldwide”datasetcompiledbytheWorldBank.Thisdatabaseprovidesinformationfor365corridors(consistingofacombinationof48sendingand105receivingcountries)andbyremittanceserviceproviderregardingthefeepaidbythesenderforsendingtheequivalentsofUS$200andUS$500inlocalcurrency.Italsocontainstheexchangerateappliedtothetransaction,ifavailable,thetypeoftheremittanceserviceprovider(e.g.,aBankorMoneyTransferOperator-MTO),thetimeittakesforthemoneytobecomeavailabletothereceiver,thepaymentinstrumentthatcanbeusedbythesenderandtheformofthepaymenttothereceiver(e.g.cashtocash)aswellastheaccesspointfortheremittanceservice.Thedataareavailableonaquarterlybasisfrom2011Q1onwards.Intheanalysisbelow,theremittancecostasashareoftheamounttransferredaveragedatthecountrylevelisthemainvariableofinterest.2Inaddition,theWorldBankalsocompilesadatabaseonremittanceinflowscovering215countriesandterritoriesgoingbacktothe1980s.Thisdatabaseis,however,carriedoutonanannualbasis,andthereforedoesnotallowtoexploitthequarterlyvariationsinthecostofremittances.Moreover,onewouldexpectremittanceflowstorespondsharplytoshort-termvariationsintransactioncosts,whichannualdatacanfailtocaptureormay“oversmooth”.Toaddressthisissue,weconstruct,asdiscussedbelow,anewanduniquedatasetofquarterlyremittanceflowsforasampleof95countries,consistingof18high-incomecountries,62middle-incomecountriesand15low-incomecountries.Thedatarunfrom1971Q1forahandfulofcountriesthrough2020Q4formostcountries.3ThenewquarterlyremittancedatabasebuildsonthemonthlydatasetfromKpodaretal.(2021).Theapproachusedinthispaperissimilar,withthemainsourcesbeingthedetailedbalanceofpayments(BOP)andstatisticalnotespublishedbynationalcentralbanksandstatisticalinstitutes.Forsomecountries,dataarereportedinlocalcurrencyoradifferentcurrencythantheUSdollar,inwhichcase,weusethequarterlyaverageexchangeratefromtheIMF'sInternationalFinancialStatistics(IFS)databaseorrelevantcentralbankstoconverttheremittanceflowsintoUSdollars.Thecompilationoftheremittancedatafollowsaninternationallyaccepteddefinitionwherebyremittancesarethesumofpersonaltransfersandcompensationofemployees.4ForcountriesthatdonotreportpersonaltransfersintheirBOP,dataonworkers'remittanceshavebeenusedinsteadasaproxy.Whendatacompensationof2Asimpleaverageisadoptedasdataonthemarketshareofthedifferentremittanceserviceprovidersarenotavailable.3Twocountrieshavequarterlydatafromthe1970s,andthisfigurerisesquicklyto30countriesintheearly2000s.From2010,thesamplereaches70countriesbeforestabilizingabove90countriesfrom2017onwards.4Personaltransfersincludeallcurrenttransfersincashorinkindbetweenresidentandnonresidentindividuals,regardlessofthesourceofincomeofthesenderandtherelationshipbetweenhouseholds.Compensationofemployeesreferstotheincomeofcross-border,seasonal,andothershort-termworkerswhoareemployedinaneconomywheretheyarenonresident,orresidentsemployedbynonresidententities.INTERNATIONALMONETARYFUND7IMFWORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?employersismissing,theyarenotaccountedforgiventhattheseflowsaretypicallymarginalcomparedtothesizeofpersonaltransfers.Thecombinationofthequarterlyremittancesflowsandcostsdataresultsinasampleof71countries,coveringaperiodfrom2011Q1to2020Q4(Annex1providesthesamplecomposition).Theothervariablesinthemodelwillbediscussedinthesubsequentsectionsastheyarebroughtinthemodelspecification.B.StylizedFactsonRemittanceCostsFigure1illustratestheaveragefeeasapercentofaremittanceofUS$200bycountryduringtheperiod2011Q1to2020Q4.ThecostsformigrantstosendmoneyacrossbordersareextremelyexpensiveinsouthernAfrica(e.g.Angola,BotswanaandNamibia),wheretheyreachedmorethan2.5timesthesampleaverage(7.5percent),oftenduetohighexchangeratemargins.Smallislandsalsoexhibithighremittancecosts,probablyreflectinglackofeconomyofscaleandlimitedintegrationintotheinternationalfinancialsystem.Attheotherendofthespectrum,thelowestcostsareprevalentineasternEurope.Inbetween,awiderangeofcountriesatdifferentlevelsofdevelopmentexist,withdifferentcorridor-specificcharacteristics.Figure1.Averagefeeasashareofa$200USDremittance(2011Q1-2020Q4)(percent)Note:TheredlineindicatesthesampleaverageSource:RemittancePricesWorldwide(WorldBank)INTERNATIONALMONETARYFUND8IMFWORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?Whileremaininghigh,remittancecostshavedeclinedonaveragebyabout5percentduringafive-yearperiod(2016Q1-2020Q1).Butthispicturemaskssignificantheterogeneityacrosscountries(Figure2).Eventhoughmorecountrieshaverecordedadecreasethananincreaseinfees,themagnitudesarestriking.Remittancecostsincreasedbymorethan40percentintheGambia,Afghanistan,andtheKyrgyzRepublic,albeitfromalowerstartingpointforthelatter.5Thelargeincreaseinremittancescostsinthesecountrieswasmainlydrivenbyhigherexchangeratemarginsonthebackofvolatileanddepreciatingcurrency.Ontheotherhand,manycountriessuchasLatviamanagedtoachieveasignificantreductioninremittancecosts,probablyduetoenhancedcompetitionandtheriseofdigitalremittances.Nonetheless,thedeclineincostsobservedinLesothoandEswatiniwastemporary,asitreflectedthereductioninfeesimplementedbySouthAfricanbanksasawaytoproviderelieftocustomersearlyinthepandemic.Figure2.ChangeinAveragefeefora$200USDremittance(2016Q1-2020Q1)(percent)Note:Theredlineindicatesthesampleaverage.ThechartexcludesSyriaandAmeniathatrecordedanunusuallylargeincreaseintransactioncosts.Source:RemittancePricesWorldwide(WorldBank)andauthors’calculations.5Figure2excludestwooutliers:ArmeniaandSyriawithmorethanatwo-foldincreaseinremittancecostsduringthesameperiod.INTERNATIONALMONETARYFUND9IMFWORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?Lookingatthedevelopmentsinremittancecostoveradecade(2011-20),the5percentdeclineinthesecondhalfoftheperiodwasmodestrelativetothelargereductionachievedinthefirsthalfoftheperiod(Figure3).Whilefurtheranalysisisrequiredtouncoverthefactorsbehindthislargedecline,includingtheroleofcompetition,itseemstohavecoincidedwiththenarrowingoftheinterestspread,aproxyoffinancialintermediationcost(associatedwiththetraditionalborrowingandlendingoperationsofbanks).Thismaynotbesurprisingasremittanceoperators,includingFintechcompanies,oftenrelyonthetraditionalcross-borderpaymentsinfrastructure.Figure3alsoshowsthattheremittancecosthasbeenconsistentlyhigherthantheinterestratespread,withthegaphavingnarrowedonlymarginallyoveradecade.Figure3.TrendsinAveragefeefora$200USDremittanceandInterestRateSpread(2011-20)(percent)10RemittancecostInterestratespread987652010201220142016Year20182020Sources:RemittancePricesWorldwide(WorldBank),andWorldDevelopmentIndicators.Thereisalsosomeheterogeneityinremittancecostsregardingthetypeofremittanceproviders.RemittancefeeschargedbytraditionalbankstendtobemoreexpensivethanMTO’sandthatofthepostoffice(Figure4),reflectinghigherregulatorycostsfacedbybanksandremittanceservicesnotbeingthemostimportantproductofthelargerpackageofservicesthattheirclientsreceive(Beck,JanfilsandKpodar,2022).Aclearnegativecorrelationisnoticeablebetweenquarterlyremittancecostsandremittanceflows(Figure5).Countrieswithlowerremittancecoststendtohavehigherremittanceflows,andconverselyhigherremittancecostsweighonmigranttransfers.Whiletherearecertainlyotherfactorsaffectingremittancesbeyondcosts,itisstillnotclearwhetherhighremittancecostresultthemselvesfromthesmallerremittancemarket,thoughFigure5offerssuggestiveevidencethatcostsmatterforremittances.Theeconometricsectionwillhelpprovideamorerigorousanswer.INTERNATIONALMONETARYFUND10IMFWORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?Figure4.Averagefeefora$200USDremittancebyTypeofProvider(2011Q1-2020Q4)(percent)BankMoneyTransferOperatorPostofficeSources:RemittancePricesWorldwide(WorldBank)andauthors’calculations.Figure5.RemittancesFlowsandAveragefeefora$200USDremittance(2011Q1-2020Q4)1086420-10123Remittancecost(percent)inlogFittedvalueSources:RemittancePricesWorldwide(WorldBank)andauthors’calculations.INTERNATIONALMONETARYFUND11IMFWORKINGPAPERSHowDoTransactionCostsInfluenceRemittances?C.TheModelandEconometricApproachToanalyzetheelasticityofremittancesflowstotransactioncosts,thepaperreliesonthefollowingmodelestimatedonasampleof71countrieswithdataovertheperiod2011Q1-2020Q4:???ln(???)?,?+?

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