Foreign Remittances and Changes in Household Savings and Consumption Behavior: A District-Level Study from Poonch

Abstract

This study examines the influence of foreign remittances on household savings and consumption behavior in District Poonch, Kashmir, a region with a high rate of international migration. Using a quantitative research design, data was collected from 200 remittance-receiving households selected through multi-stage sampling from urban and rural areas of Rawalakot, Abbaspur, and Hajira tehsils. A structured questionnaire captured data on remittance inflows, spending patterns, and saving behavior. The data was analyzed using SPSS version 25, applying descriptive statistics, Pearson correlation, chi-square tests, and linear regressionto identify significant relationships between variables.

The findings reveal a significant increase in household savings, rising from an average of PKR 4,800 to PKR 14,600 per month post-remittance. Moreover, households revealed a marked shift in consumption, with increased spending on education, healthcare, and housing, and a decline in expenditure on basic necessities. Statistical analysis confirmed that there is a significant positive correlation between the amount of remittances received and improvements in savings and welfare-oriented spending. The study also highlights rural-urban disparities, with urban households more likely to invest remittances in long-term assets, while rural households focused on debt repayment and essential consumption. Overall, the results assert that foreign remittances serve as a catalyst for socio-economic improvement, enhancing household financial security and quality of life in remittance-dependent communities.The study recommends targeted financial literacy programs, improved access to financial services in rural areas, and policy interventions to ensure the sustainable and developmental use of remittances at the household level.