Quantile analysis of the aspirational middle class in Malaysia: spending behaviour emulation or dissociation?

Abstract

PurposeThis paper focusses on how the educated and less-educated middle class react differently to income increases, against an intertwined literature backdrop of Engel's law, quality of life, aspirational and conspicuous consumption. The paper seeks to answer two main questions: Is there evidence of the middle class, particularly the educated, trying to emulate the upper class by shifting towards aspirational consumption? Is there any distinct expenditure behaviour amongst the middle class?Design/methodology/approachCombining the Malaysian 2016 Household Expenditure Survey (HES) and the 2016 Consumer Price Indices datasets, quantile estimations are applied on the merged dataset of 14,326 households.FindingsThere is evidence of the educated middle class emulating the upper class in terms of food share, home furnishing and starchy produce expenditure behaviour. The less-educated middle class exhibits a predilection for home furnishing expenditures when income increases, whilst the educated shows signs of dissociating themselves from such material acquisitions. The paper concludes that the middle class is collectively an aspirational class, but with diverging paths towards upward social mobility between the educated and less-educated households.Originality/valueAspirational consumption of the middle class has not been given detailed empirical treatment at the household micro-level in the literature, especially for upper-middle income countries like Malaysia. The paper starts off by detecting an anomaly in the Engel's food share coefficients, where the middle class sees unexpected larger declines in food share than those of the upper class. This is the paper's departure point from the literature.