Applying the Paired-t-test and Cohen’s d to Assess How Far Remittances Improve Household Welfare in Zanzibar: The Case of Wete and Chake-Chake Districts in Pemba

Abstract

Diaspora remittances play a significant role in supporting household income in many developing countries, particularly in areas with limited employment opportunities and weak social protection. This paper uses the Paired-t-test and Cohen’s d to determine how far remittances have been used to improve household welfare. Also, it is guided by the altruism theory of remittances, the Amartya Sen Framework, and the self-interest theory of remittances. Three data collection methods were employed—household surveys, documentary reviews, and in-depth interviews—to source a sample of 300 households that received remittances, and 15 key informants. The results show that remittances tend to improve household welfare, with most households reporting increased welfare levels: from 77% at a low level and 23% at a high level before receiving remittances to 18% at a low level and 82% at a high level afterwards. Paired-t-tests confirmed significant welfare improvements in the household indicators, with households shifting from low levels to high levels of improvement, and remittances acting as an intervening factor. The Cohen’s d indicated a medium to large effect size across all welfare indicators. The paper concludes that remittances play a statistically significant role in the improvement of household welfare in Pemba. The paper recommends promoting the productive use of remittances through increased diaspora engagement, and the strengthening of formal remittance channels to maximise benefits.