What are migrants willing to pay for better home country institutions?

Abstract

We conduct a contingent valuation investigation of the preference of international migrants for better home country institutional quality. Our study uses contingent valuation questions in a survey of 1.6% of Vietnamese adult migrants living in New Zealand (NZ) in 2016 to establish the compensating differentials that make those migrants indifferent between residing in NZ and returning to Viet Nam (VN) in hypothetical scenarios. We find that the estimated willingness to pay for an incremental unit improvement in institutional quality in VN is, on average, about NZD 80 per week (approximately 33% of the average weekly wage in VN in PPP terms for the same period), and positively associated with the respondents’ age and the perceived importance of institutional quality in VN to their repatriation intentions. This study underscores the importance of institutional quality to migration decisions by showing that migrants are willing to trade-off part of their regular income for better home country institutional quality. © 2019, The Author(s).