Mental accounting and remittances: A study of rural Malawian households

Simon Davies, Joshy Z Easaw, Atanu Ghoshray

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17 Citations (SciVal)


In this paper we use a behavioural approach to studying household consumption behaviour in Malawi. In particular we are interested to know whether households use mental accounting when consuming different categories of good. It is useful for assessing the impact of remittances on household consumption behaviour. We use 1998 cross-sectional data to find the following key results: (i) mental accounting systems are in operation; (ii) remittance income exhibits a lower marginal propensity to consume than other income sources, (iii) remittances are widely used to fund education consumption, (iv) credit plays an important role in funding education and farming.
Original languageEnglish
Pages (from-to)321-334
Number of pages14
JournalJournal of Economic Psychology
Issue number3
Publication statusPublished - 1 Jun 2009


  • Global political economy


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