See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/227439493

ANALYSIS OF INCOME AND EXPENDITURE OF HOUSEHOLDS IN THE EAST

COAST OF PENINSULAR MALAYSIA

Article · January 2011

Source: RePEc

CITATIONS READS

2 16,042

4 authors:

Noorhaslinda Kulub Abd Rashid Aslina Nasir

Universiti Malaysia Terengganu 12 PUBLICATIONS   32 CITATIONS   
13 PUBLICATIONS   21 CITATIONS   
SEE PROFILE
SEE PROFILE

nik hashim nik mustapha Nik Fuad Bin Kamil

30 PUBLICATIONS   385 CITATIONS   
Universiti Malaysia Terengganu
5 PUBLICATIONS   16 CITATIONS   
SEE PROFILE
SEE PROFILE

Some of the authors of this publication are also working on these related projects:

Potensi Industri Akuakultur Pantai Timur Dengan Aplikasi Analisis Penyampulan Data (Data Envelopment Analysis) - FRGS, MOHE View project

Internalisation of External Cost in Traffic Congestion of Selected Highways in Malaysia - ERGS, MOHE View project

All content following this page was uploaded by nik hashim nik mustapha on 03 July 2014.

The user has requested enhancement of the downloaded file.

 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
59
JANUARY 2011. VOLUME 2. NUMBER 1

ANALYSIS OF INCOME AND EXPENDITURE OF HOUSEHOLDS IN THE EAST COAST

OF PENINSULAR MALAYSIA
Noorhaslinda Kulub Abd. Rashid
lindarashid@umt.edu.my

Aslina Nasir
pzna84@gmail.com

Nik Hashim Nik Mustapha

nhm06@umt.edu.my

Nik Fuad Kamil

Faculty of Management and Economics

Universiti Malaysia Terengganu (UMT)

ABSTRACT

Analysis of expenditure and income patterns of households in Malaysia that focuses on income,
expenditure, loan, and saving is important. This study analyzes the impact of post global economic crisis
on the income and expenditure patterns of Malaysian households. The study identifies major
components of household’s expenditure on food, education, and health; as well as saving and loan, in
relation to household income. In Pahang, Kelantan and Terengganu, the total expenditures come from
the variables such as income, housing loan, automobile loan and expenditure for education. These
variables were selected due to the highly significant value that contributed to the Total of Expenditures
(EXTO).

Keywords: expenditure, income, household.

----------------------------------------------------------------------------------------------------------------------------------

1.0 INTRODUCTION

In Malaysia the slogan ’Spend Wisely’ is often promoted and advertised at shopping centers as well as in
the media. The slogan addresses the importance of wise spending under whatever economic situations.
With the increase in Consumer Consumption Index (CPI) for goods and services, wise spending is the
only solution to reduce consumer problems. Consumer problems are many but it revolves around the
balancing act of income, expenditure, loan, and savings.

Income level is the major factor that determines consumption spending of an individual. However,
income is not the only factor that influences spending, as loan and saving also affect spending. Spending
of course fulfill the needs for basic necessity of an individual and family members. Leon Zurawicki &
Nestor Braidot (2004), reported that households tend to make an adjustment to their income and
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
60
JANUARY 2011. VOLUME 2. NUMBER 1

expenditures to fulfill their needs during an economic crisis or recession. Stephen (2001) disclosed that
consumption and expenditures pattern changes along with changes in income level.

2.0 ISSUES IN INCOME AND EXPENDITURE

Recession and fluctuations in the economy would normally cause changes in the socioeconomic and
social standing of the populace. These changes often lead to social crisis (Walton & Manuelyan, 1998).
Atsushi Maki (2006) reported that economic crisis lead to sudden changes in saving behavior as well as
lifestyle. However variation in income among the population would lead to wider income disparity
between households. Household expenditure and income disparity can lead to significant differences in
either rural or urban setting in terms of expenses on basic needs. An urban household tends to increase
consumption based on the increment of income in order to improve their lifestyle (Farkhanda Shamim &
Eatzaz Ahmad, 2007). Micheal Beine et. al (2001) found that households in United States prefer to spend
their money at shopping centers rather than use their leisure time for other activities.

This research seeks to know the factors that influence household income and expenditure in Malaysia.
Households often change their spending patterns whenever economic crisis occurs. In 1986, 1997 till
1998 and in 2008, Malaysian had experienced significant changes in the economy arising from currency
speculation and global economic crisis. Households in Malaysia spend their money wisely in respond to
the structural changes in the economy.

3.0 RESEARCH OBJECTIVES

The general objective of this research is to analyze levels of household’s income and patterns of
expenditure among the East Coast population. The specific objectives is to analyze post global economic
crisis on the income and expenditure patterns of the East Coast households. To identify major
components of household’s expenditure of the East Coast households as the percentage of total income
in terms of food, education, health, utility as well as saving and loan. To determine factors that influence
household’s propensity to consume on major components of expenditure in relation to income. To
estimate an empirical two stage least square model for the household’s expenditure.

4.0 ANALYTICAL FRAMEWORK

Simple random sampling was used as the basis in the selection of the respondents. Three states in the
East Coast of Peninsular Malaysia were selected namely Pahang, Kelantan and Terengganu. The
selection of districts and mukims was purposively based on the suggestion from District Officers due to
their knowledge and wide experience about the survey areas. In Pahang, two selected districts were
Kuantan (urban) and Pekan (rural), while for Kelantan, the selected districts were Kota Bharu (urban)
and Kuala Krai (rural). Lastly for Terengganu, Kuala Terengganu and Setiu were chosen to represent the
urban and rural area respectively.Based on mukims selected in each state, respondents were drawn by
simple random sampling technique.

5.0 THE DISTRIBUTION OF HOUSEHOLD SAMPLING FOR EACH STATE & DISTRICT

To make it more clear, the information provided on the below table shows how the distributions of
respondents (household) will be made.
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
61
JANUARY 2011. VOLUME 2. NUMBER 1

From Figure 1, the number of total respondents for three states are 645 which separated into urban and
rural area. In Pahang, the number of urban area, Kuantan and rural area,Pekan are 118 and 100
respectively with total of respondents in both area 218. While, the total number of respondents in
Kelantan is 214 with 110 and 104 number of respondents respectively in Kota Bharu (urban) and Kota
krai (urban). For Terengganu, the number of respondents in Kuala Terengganu is 103 that represent as
an urban area whereas Setiu represent as a rural area with 110 of respondents. So, the total number of
respondents in Terengganu is 213.

6.0 ANALYSIS

In this research, two types of analysis were used – the descriptive and inferential analysis (Correlation
and Regression). Descriptive analysis is the one of analysis method to describe the data or certain
information in the simple way, more clear, orderly and easy to be understanding. Usually the data will
be interpret and analyzed according to the years of research (whether time series or cross sectional
data) to make it more clearance. Furthermore, this statistic data will be transformed into schedule or
graph according to information suitability. Correlation analysis is used to achieve the second objective of
study. This analysis involved the hypothesis testing that will be established between income and quality
of life indicators based on secondary data. While for regression analysis, on the other hand is used
based on regression model form so-called “Simultaneous Equation” to identify the relationship and the
pattern of expenditure that interrelated to each others. In this research the expenditure will be divided
into six components such as food, education, utility consumption, saving and loan payment.

7.0 RESULT AND DISCUSSION

In general, are relatively low which selected at least 0.3 because the study were using the cross-
sectional data. Based on the result as shown in Table 1, there are 8 equation systems for Pahang
household according to their value of which over than 0.3.
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
62
JANUARY 2011. VOLUME 2. NUMBER 1

Most of t-values for Equation 1 in Pahang are significant at 0.01 and 0.05. There is positive relationship
between INC (income) and EXTO (Expenditure Total) whereby the EXTO clarify as an endogenous
variable. About 1 percent (1%) increased in income necessitate an increase of 0.21 percent (%) in total
of expenditure (Refer to equation 1). This scenario is consistent to the Engel Theory, which can be
explained by the function that relates the equilibrium quantity for individual with their income level
(Ahmad Mahdzan Ayob, 1991). It means that, the income level will generate to their spending behavior
(total expenditures).

While, for two variables such as HLO (Housing Loan) and ALO (Automobile Loan), there are highly
correlated or strongly relationship with EXTO (Expenditure Total) at 0.01 level of significant or 99.0 %
(probability level). As a conclusion, the reason of their total of expenditure is more than their income is
most of them like to spend more money to fulfill their needs by making loan such as housing loan and
automobile loan from any financial.

Next, if refer to the Equation 2, there is also the same findings as in Equation 1 whereby INC as an
endogenous variable. The Equation 1 and 2 have inter related each other because in this study the 2SLS
Equation Systems were used simultaneously. The highly correlated variables at 0.01 level of significant
are EXTO, FSA (Family Size) and also DEP (Dependent). It shows that the number of family members and
the number of dependent in family’s will influence the income level whether it is sufficient or not. That’s
why in the case of Pahang, The value for TBL (Total Borrowing Loan) can be rank as the highest value
among the variables. The household tend to make loans if there is insufficient for make their
expenditures for certain item.
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
63
JANUARY 2011. VOLUME 2. NUMBER 1

Table 1: Results of 2SLS Regression Analysis for Pahang

Endogenous Variables
Regressor
EXTO EXF EXC EXE SAV TBL INC EXL
Constant 593.37 50.457 -185.16 -105.28 93.024 9.3627 -204.62 -254.57
(3.127)*** (0.8788) (-1.983)** (-1.774)** (0.9972) (0.253) (-0.2916) (-1.715)**
EXTO 0.1339 0.1184 0.04215 1.2146 0.623
(10.69)*** (2.987)*** (0.5834) (7.809)*** (5.715)***
INC 0.1207 0.00209 0.05506 0.00612 -0.07507
(1.808)** (0.1405) (1.1013) (0.4128) (-0.8983)
HLO 1.2539 1.1058
(4.475)*** (21.05)***
ALO 0.948 -0.1184 1.0478
(3.244)*** (-1.057) (20.63)***
FSA 20.779 -33.942 2.6439 546.72 25.319
(3.422)*** (-1.05) (0.3979) (4.738)*** (0.4503)
AGE 1.6877 1.9913 -0.5563 19.937
(1.759)* (1.304) (-0.3261) (1.835)
EXT 0.6924
(2.056)**
EXE 3.0281
(3.197)***
Exogenous
EDLO -0.00995 0.9955
Variables
(-1.044) (10.77)***
TBL 0.02925
(0.5981)
DEP 28.408 22.723 5.1121 -593.59 -81.063
(2.559)** (3.3260)*** (0.1466) (-4.963)*** (-1.381)
DPE -20.238 -261.97 -100.83
(-0.5295) (-0.6156) (-0.9873)
DSE 32.554 -586.13 -35.931
(0.8906) (-1.388) (-0.3439)
DUE 45.403 -475.37 31.354
(1.149) (-1.041) (0.2813)
SEX -14.968
(-0.5297)
MST -31.917

(-0.3394)
LOC 72.742

(1.645)
R2 0.5924 0.5827 0.3619 0.3093 0.3851 0.9288 0.3755 0.5864
DW 1.9382 1.6312 1.7452 1.8111 1.8921 1.7928 1.9037 1.6199
* significant at 0.1 level or 90%
** significant at 0.05 level or 95%
*** significant at 0.01 level or 99%
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
64
JANUARY 2011. VOLUME 2. NUMBER 1

EXTO  593.37  0.1207INC  1.2539HLO 0.948ALO  3.0281EXE ………..(Equation 1)

EXF  50.457  0.1339 EXTO  20.779 FSA  1.6877 AGE
EXC  185.16  0.1184 EXTO  0.1184 ALO  28.408 DEP  1.9913 AGE
EXE  105.28  0.00209 INC  0.6924 EXT  0.00995 EDLO  22.723DEP  20.238 DPE  32.554 DSE
 45.403DUE  14.968SEX
SAV  93.024  0.04215 EXTO  0.05506 INC  33.942 FSA  0.5563 AGE  5.1121DEP  72.742 LOC
TBL  9.3627  0.9955 EDLO  1.1058 HLO  1.0478 ALO  0.00612 INC  2.6439 FSA
INC  204.62  1.2146 EXTO  546.72 FSA  19.937 AGE  593.59 DEP  261.97 DPE  586.13DSE  475.37 DUE
…(Equation 2)
EXL  254.57  0.07507 INC  0.623EXTO  81.063DEP  31.917 MST  25.319 FSA  100.83DPE
 35.931DSE  31.354 DUE

Where

EXTO = Expenditures total EXF = Food Expenditures

EXE = Education Expenditures TBL = Total Borrowing Loan
EXL = Loan Expenditures INC = Income
HLO = Housing Loan ALO = Allowance Loan
FSA = Family’s Size AGE = Age
EXT = Transportation Expenditures EDLO = Education Loan
DEP = Dependent DPE = Private
DSE = Self Employment DUE = Unemployment
SAV = Saving

The findings in Kelantan are slightly as same as Pahang where by the TBL (Total Borrowing Loan) still
show the highest =0.6831. Most of t-values for Equation 1 in Kelantan are significant at 0.05 and 0.01.
There is positive relationship between INC (income) and endogenous variable, EXTO (Expenditures
Total). About 1 percent (1%) increased in income means that 0.14 percent (%) changes in total of
expenditure (Refer to equation 1). Besides of income, there are three independent variables that have
strongly relationship with EXTO at significant level at 0.05 and 0.01, which identified as EXE
(Expenditures for Food), INC (Income), HLO (Housing Loan), and lastly ALO (Automobile Loan).

If refer to the Equation 2, there is also the same findings as in Equation 1 whereby endogenous variable,
INC have strongly relationship (0.05 and 0.01 level of significant) between INC and five exogenous
variables such as EXTO, FSA (Family Size), DEP (Dependent), DSE (Dummy for Self Employment) and DUE
(Dummy for Unemployment). So, based on these findings, the number of family members and the
number of dependents in family’s strongly contributed to the level of income. In addition, with the self
employment and unemployment of the household, it gives an impact to the level of income as a whole.
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
65
JANUARY 2011. VOLUME 2. NUMBER 1

Table 2: Results of 2SLS Regression Analysis for Kelantan

Endogenous Variables
Regressor EXTO INC
EXF EXE TBL EXL
(Eq. 1) (Eq. 2)
399.93 53.191 17.241 194.39 -171.26 -416.18
Constant
(4.587)*** (0.795) (0.5165) (2.355)** (-0.2954) (-3.847)***
0.1454 1.3411 0.7407
EXTO
(8.039)*** (8.387)*** (7.609)***
3.0656
EXE
(5.81)***
0.0881 0.00569 -0.01586 -0.0704
INC
(2.114)** (0.5587) (-0.3653) (-1.064)
1.4789 1.5557
HLO
(6.447)** (7.209)***
1.0093 1.0551
ALO
(6.377)** (7.362)***
4.5656 -7.2618 342.37 12.183
2
FSA
(0.8886) (-0.4676) (5.899)*** (0.4433)
2.3312 10.781
AGE
(2.072)** (1.119)
Exogenous 0.0698
EXT
Variables (0.542)
0.0511 0.9731
EDLO
(2.135)** (12.5)***
-0.00188
TBL
(-0.1088)
26.422 -370.82 -60.343
DEP
(6.545)*** (-5.268)*** (-2.019)**
-5.6517 -361.00 -57.645
DPE
(-0.2201) (-1.049) (-0.6626)
-19.89 -506.44 90.486
DSE
(-0.8924) (-1.726)** (1.162)
-11.224 -904.18 -0.5819
DUE
(-0.4147) (-2.741)*** (-0.00599)
-24.285
SEX
(-1.407)
6.8921
MST
(0.0954)
R2 0.6493 0.4439 0.3314 0.6831 0.3949 0.4953
DW 1.9334 1.7258 1.8048 1.9356 1.6200 1.7707
* significant at 0.1 level or 90%
** significant at 0.05 level or 95%
*** significant at 0.01 level or 99%

In Kelantan, there are 6 equation systems with their significant variables at 99%, 95% and 90%.
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
66
JANUARY 2011. VOLUME 2. NUMBER 1

EXTO  399.93  3.0656 EXE  0.0881INC  1.4789 HLO  1.0093 ALO ………………(Equation 1)
EXF  53.191  0.1454 EXTO  4.5656 FSA  2.3312 AGE
EXE  17 . 241  0 . 00569 INC  0 . 0698 EXT  0 . 0511 EDLO  0 . 00188 TBL  26 . 422 DEP  5 . 6517 DPE
 19 . 89 DSE  11 . 224 DUE  24 . 285 EXE
TBL  194.39  0.01586 INC  1.5557 HLO  1.0551ALO  7.2618 FSA  0.9731EDLO
INC  171.26  1.3411EXTO  342.37 FSA  10.781AGE  370.82 DEP  361.00 DPE  506.44 DSE  904.15 DUE
…………..(Equation 2)
EXL   416 .18  0 .7407 EXTO  0 .0704 INC  12 .183 FSA  60 .343 DEP  57 .645 DPE  90 .486 DSE  0 .5819 DUE

Table 3: Results of 2SLS Regression Analysis for Terengganu

Endogenous Variables
Regressor EXTO EXF INC TBL EXL
Constant 458.52 13.774 3565.0 -164.09 -546.29
(3.534)*** (0.162) (3.723)*** (-2.223)** (-2.746)***
EXTO 0.0905 0.8776 0.07594
(5.37)*** (4.328)*** (10.39)***
INC 0.07515 0.069 0.07096
(1.436) (2.677)*** (-1.185)
HLO 1.3856 1.001
(9.011)*** (15.34)***
ALO 1.4144 0.7556
(6.948)*** (8.223)***
FSA 20.288 161.33 12.519 23.34
(3.565)*** (2.099)** (1.765)** (1.203)
AGE 2.9636 -24.661
(2.309)** (-2.069)**
EXT

Exogenous
Variables EXE 3.046
(6.565)***
EDLO 0.8633
(10.74)***
DEP -359.8 -86.608
(-4.582)** (-3.30)***

DPE -385.44 141.41

(-0.8428) (1.295)
DSE -766.03 351.97
(-1.645) (3.001)***
DUE -156.67 351.91
(-0.309) (2.928)***
SEX

MST -113.69
(-0.9866)
2
R 0.7127 0.3083 0.3019 0.8226 0.482
DW 1.5575 1.5612 1.7637 2.0195 1.7979
* significant at 0.1 level or 90%
** significant at 0.05 level or 95%
*** significant at 0.01 level or 99%
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
67
JANUARY 2011. VOLUME 2. NUMBER 1

Compared to Pahang and Kelantan, Terengganu has 5 equation systems with their significant variables
at 99%, 95% and 90% as below. Most of t-values for Equation 1 in Terengganu are significant at 0.01.
There is positive relationship between INC (income) and endogenous variable, EXTO (Expenditures
Total). About 1 percent (1%) increased in income means that 0.13 percent (%) increase in total of
expenditures (Refer to equation 1). Contrast to the case of Pahang and Kelantan, Terengganu does not
have any relationship between income and total of expenditures. With highest value in TBL (Total
Borrowing Loan), means that Terengganu household tend to spend more money by making loan even
though they are insufficient of income. It means that in Terengganu, income does not contribute to the
expenditure pattern among the households. Nevertheless, there are three independent variables that
have strongly relationship with EXTO at significant level at 0.05 and 0.01, which identified as EXE
(Expenditures for Food), INC (Income), HLO (Housing Loan), and lastly ALO (Automobile Loan).

Next, for Equation 2, the endogenous variable, INC has highly correlated to the four exogenous variables
such as EXTO, FSA, AGE (Age) and DEP at 0.01 and 0.05 level of significant. Compared to Pahang and
Kelantan, Terengganu has strongly relationship between INC and AGE because the more their age, the
less productive to contribute to the job market. Furthermore, after their pension period, their income is
not sufficient to bear the members of family. That’s why the relationship between INC and AGE are
negative.

EXTO  458.52  0.07515 INC  1.3856 HLO  1.4144 ALO  3.046 EXE …………(Equation 1)
EXF  13.774  0.0905 EXTO  20.288 FSA  2.9636 AGE
INC  3565.0  0.8776EXTO  161.33FSA  24.661AGE  359.8DEP  385.44DPE  766.03DSE  156.67 DUE
………(Equation 2)
TBL  164.09  0.0069 INC  1.001HLO  0.7556 ALO  12.519 FSA  0.8633EDLO
EXL  546.29  0.07594EXTO  0.07096INC  23.34FSA  86.608DEP  141.41DPE  351.97 DSE  351.91DUE  113.69MST

8.0 ANALYSIS OF EXPENDITURE

In Pahang, Kelantan and Terengganu, the total expenditures come from the variables such as income,
housing loan, automobile loan and expenditure for education. These variables were selected due to the
highly significant value that contributed to the Total of Expenditures (EXTO). The detail explanations for
these variables can be illustrated as below whereby the total expenditures for income, housing loan,
automobile loan and education expenditure with their slightly differences respectively.

Table 1: Correlation between Income and Total Expenditure

INC PAHANG KELANTAN TERENGGANU

200 1454 994 1336
400 1478 1012 1351
600 1502 1030 1366
800 1526 1047 1381
1000 1550 1065 1396
1200 1574 1082 1411
1400 1599 1100 1426
1600 1623 1118 1441
1800 1647 1135 1457
2000 1671 1153 1472
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
68
JANUARY 2011. VOLUME 2. NUMBER 1

Figure 2: Correlation between Income and Total Expenditure

Based on the Figure 2 in above, the correlation between income and total expenditure shows the
difference trend in three states. Pahang shows the highest value, followed by Terengganu and lastly
Kelantan whereby the higher the income values the higher the total of expenditures. These strongly
relationship means that once the income level increase even 1%, the total expenditure tends to be
higher with proportionately.

Table 2: Correlation between Housing Loan and Total Expenditure

HLO PAHANG KELANTAN TERENGGANU

200 1873 1343 1623
400 2124 1639 1900
600 2375 1935 2177
800 2625 2231 2454
1000 2876 2527 2731
1200 3127 2822 3008
1400 3378 3118 3285
1600 3628 3414 3562
1800 3879 3710 3839
2000 4130 4005 4117
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
69
JANUARY 2011. VOLUME 2. NUMBER 1

Figure 3: Correlation between Housing Loan and Total Expenditure

Next, the housing loan and total expenditure in Figure 3 show the different pattern for these three
states compared to the Figure 2 in above. Pahang was the first ranking in making housing loan, followed
by Terengganu and then Kelantan. Based on the findings in this surveying to the urban and rural area for
each state, majority of the respondent agreed that the expensive housing loan especially in urban area
has increased the total expenditure among of them. Instead of the standard of living in Kelantan was
relatively cheaper compared to the Pahang and Terengganu, the large proportion in making housing
loan made them suffering to survive in comfortable residence.

In terms of making automobile loan, the correlation between automobile loan and total expenditure are
dramatically different in Terengganu compared to Pahang and Kelantan. There is a gap between
Terengganu and these two states on making automobile loan, shown in Figure 4 as below.

Table 3: Correlation between Automobile Loan and Total Expenditure

ALO PAHANG KELANTAN TERENGGANU

300 1871 1324 1720
600 2156 1627 2145
900 2440 1930 2569
1200 2724 2233 2993
1500 3009 2536 3418
1800 3293 2838 3842
2100 3578 3141 4266
2400 3862 3444 4691
2700 4146 3747 5115
3000 4431 4049 5539
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
70
JANUARY 2011. VOLUME 2. NUMBER 1

Figure 4: Correlation between Automobile Loan and Total Expenditure

Lastly, the same findings that we can see in these three states are education expenditure. The
correlation between education expenditure and total expenditure are approximately similar each other.
It means that in theses three states, the education is one of the important aspects to be emphasized in
order to born the higher level education person and first class mentality students. So that, majority of
the parent agreed that investment in education aspects can guaranteed the positive return and benefit
for their children in the future.

Table 4: Correlation between Education Expenditure and Total Expenditure

EXE PAHANG KELANTAN TERENGGANU

200 1959 1385 1651
400 2565 1998 2260
600 3170 2611 2870
800 3776 3224 3479
1000 4382 3837 4088
1200 4987 4450 4697
1400 5593 5063 5306
1600 6198 5677 5916
1800 6804 6290 6525
2000 7410 6903 7134
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
71
JANUARY 2011. VOLUME 2. NUMBER 1

Figure 5: Correlation between Education Expenditure and Total Expenditure

9.0 CONCLUSION

Based on our discussion in above, it is very important to highlight the household income and
expenditure in order to know how their spending pattern in the context of nowadays situation. From the
expenditure items that mentioned before this, all Malaysian especially among the household should
have good information and knowledge to manage their money and to put the priority expenses of the
total expenditures. The following below are the steps or guidance in thrift spending:

• Get to know the thrift store shopping to avoid losing money

Thrift stores fit most any budget and are not just for people with low income. Experienced savvy
shoppers pay cheap prices for household goods, gift items, and clothes that others can no longer use.
There are advantages to shopping at thrift stores, especially at the beginning of school and around the
holidays. But thrift store shopping has disadvantages too, and consumers are advised to know the
store's policies before making any expensive purchases. There are thrift store items that shoppers
should avoid to keep from losing money.

• Make a budget

A budget is absolutely one of the best tools that help us to spend less than what we make. It started
with how we make a budget in order to spend wisely and thrift. An effective budget is needed to getting
out of debt and unnecessary items. Everyone who does not budget spends more money than those who
do. It is very simple as that and very useful to apply. It doesn’t have to be painful and can even be fun.

• Limited Promotion and Unbeneficial Advertisement

In terms of government role, they should limit the promotion, campaign and advertisement for certain
company in order to educate the household to spend wisely. Sometimes unbeneficial advertisement is
 JOURNAL OF GLOBAL BUSINESS AND ECONOMICS
72
JANUARY 2011. VOLUME 2. NUMBER 1

very easy to influence the society to make a debt by using their credit card and also easier to spend
more than they do.

• Individual awareness

The awareness among the individual is the main important aspect to be emphasized in order to educate
them in how to be good money spender. Furthermore, with unstable economic and financial, it is very
important to saving our money for contingency items in the future.

As a conclusion, learning to manage the money wisely takes time and effort, but it also depends on the
individual and others in the society on how to make it reality

REFERENCES

Atsushi Maki, (2006). Changes In Japanese Household Consumption and Saving Behavior Before, During
and After The Bubble Era : Empirical Analysis using NSFIE Micro-data Sets. Japan and the World
Economy.

Farkhanda Shamim and Eatzaz Ahmad, (2007). Understanding Household Consumption Patterns in
Pakistan. Journal of Retailing and Consumer Services.

Leon Zurawicki and Nestor Braidot, (2005). Consumers During Crisis : Responses From The Middle Class
in Argentina. Journal Of Business Research.

Michel Beine, Francis Bismans, Frederic Docquier and Sebastian Laurent, (2001). Life-Cycle Behaviour Of
US Household A Nonlinear GMM Estimation On Pseudopanel Data. Journal Of Policy Modeling.

Syed, O.A. 1996. Poverty Eradication From Islamic Perspectives [online]. Available from:
http://vlib.unitarkl1.edu.my/staff-publications/datuk [Accessed in Disember 2009].

Cutler, J. (2005). The Relationship Between Consumption, Income and Wealth in Hong Kong. Pacific
Economic Review, 10 (2), 217-241.

Dejuan, J. P. and J. J. Seater. (1999). ‘The permanent income hypothesis: Evidence from the consumer
expenditure survey’ Journal of Monetary Economics, 43, 351-376.

View publication stats