Examining the Pattern of Household Monthly Income and Expenditures by State in Malaysia

Abstract

Abstract Malaysian households have exhibited significant improvements in the standard of living and economic opportunities. However, a larger household income does not always translate into an economically comfortable household. Regional variations in income and expenditure levels need to be explored for better understanding on the diversity of experiences among Malaysian households. Therefore, this study aims to investigate the pattern and relationship between household income, household expenditure, and household size among states in Malaysia. Several methods have been used such as the Pearson correlation coefficient, paired t-test, and multiple regression model using IBM Statistical Package for the Social Sciences (SPSS) version 27 and Microsoft Excel for the year 2016, 2019 and 2020. Descriptive results showed that despite the significant increase in household median income, households seemed unable to allocate the income increment to their expenses, possibly due to higher living costs requiring adjustments in expenditure. Results also showed that the expenditure growth rate outpaces the income growth rate drastically in a few states such as Negeri Sembilan and Putrajaya. The inferential results have shown that there is a significant difference in the mean monthly household median income and the mean monthly household median expenditure across states in Malaysia between 2016 and 2019. Multiple regression revealed that household median income significantly predicted household median expenditure, while household size is not significant. This study suggests government to regularly review the prices of essential goods and services to ensure they remain affordable for all households. This is crucial for improving the living standards and well-being of Malaysians.