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Abstract: The objective of this paper is to provide a more current and better understanding of expenditure patterns of the variety of consumption products and services for various groups of Malaysian society. The analysis focuses on differences in consumption across age groups, and identifies factors that affect the level of total expenditure as well as expenditure on specific consumption commodities. Estimates for income elasticities are computed to identify expenditure items as either luxuries or necessities. Differences with regard to an item being considered a necessity or a luxury are observed between urbanites and non urbanites, males and females, and married and non married individuals.
Keywords: Consumption, elasticity, expenditure, Malaysia
JEL classification: D10, D12, R20, R22
(ProQuest: ... denotes formulae omitted.)
1. Introduction
Malaysia has experienced significant economic growth over the years. Although in the most recent year, growth has somewhat slowed down, it still registered a rate of over 5 per cent from 2004 to 2008 (International Monetary Fund 2008). This translates to a higher standard of living for the population in general, which leads to a marked expansion in the overall level of spending and consumption of the general public. In fact, growth of the economy is largely because of robust consumer spending compared to other components. Private consumption continued to be a driver of total growth in the country. In addition to the increase in magnitude of spending, there have also been changes in the composition and types of goods and services demanded. These changes can be attributed to the improvement in economic standing as well as factors related to the social aspects of society.
As in other parts of the world, there have been significant changes in terms of demographics as well as the roles played by the different segments of the community in Malaysia. For instance, there are, and will continue to be, increasing numbers of women who have large portions of disposable income resulting from their move into professional occupations previously defined as exclusively male. The increase in level of educational achievement has made more occupations available to women, and enabled them to compete with men on a more equal footing.
The social and demographic changes have implications on the behaviour patterns of Malaysia's population. Of particular interest...