Using a nationally representative data set, we examine whether the individuals’ bargaining power within households affect how remittances are allocated or spent in estate households in Sri Lanka. Using the gender of the household head as a proxy for household bargaining power, separate fractional logit models were estimated within the Engle’s Curve framework for male headed and female headed households to examine the intra household bargaining on decision making on resource allocation. The results suggest that international remittances contribute to reduce food expenditure in female headed households while male headed households invest more in housing. The results further reveal that internal remittances are a major determinant of expenditures for food, communication, entertainment, non-durables, transport and ad hoc purchases of male headed households. Remitters also have a significant contribution over the allocation of resources. The contribution by them for the food expenditure share decreases while their presence as a migrant to the household increases the expenditure for education, housing, health, consumer goods, durables and expenditure for ad hoc purchases, entertainment and transport. Overall, the study concludes that remitter has a greater say over the allocation of household resources while household head play a significant role in allocating remittances on food and housing.
Keywords: Fractional Logit Model, Gender, Household Expenditure, Intra Household Bargaining, Remittances