Determinants of Muslim Household Basic Needs Consumption Expenditures

Abstract

This paper focuses on current household expenditure in an environment characterised by a high cost of living and modernisation. In order to cope with the current economic situation, individual vary in their consumption levels and lifestyles. In this study, basic needs expenditure refers to four main groups of household expenditure, namely food, housing, transportation and communication given that they make up a significant part of total household expenditure. Furthermore, the different budget constraints that vary with income and location, the different expenditure patterns reflect how people are surviving in the current economic climate. This paper identifies the factors contributing to basic needs consumption comprising food, housing, transportation and communication. The econometric analysis using Seemingly Unrelated Regression Estimation (SURE) shows that these expenditures are largely determined by the total monthly spouse income (Inc) and total borrowing (Bor) for all consumption expenditures. The results with interaction term also revealed no difference in the basic needs expenditure of urban and rural households in Selangor and Kelantan. Based on the findings, households should be educated on consumerism and financial management for effective financial planning.

Socioeconomic Sustainability for Low-Income Households: The Mediating Role of Financial Well-Being

“…Moreover, Kulub Abd. Rashid et al [19] asserted that low financial literacy levels will have an impact on financial well-being and socioeconomic status. Meanwhile, a study conducted by Krishnakumare and Singh [20] in the Tamil Nadu district of India found that factors such as financial well-being and the lack of financial literacy among poor households in family institutions have resulted in serious financial stress, which caused them to be financially unwell and affected the SES of this group.…”

Living Style and Cost of Living: A Cross-Section Analysis of B40 Households in Malaysia

“…Food Expenditure Food expenditure is any form of financial transaction to buy food and non-alcoholic beverages used at home (United Nations, 2000; Ishida et al, 2003;Tey et al, 2008;Latimaha, 2017;Mien & Said, 2018;Rashid et al, 2018;Manajit et al, 2020). Household income is one of the most important factors significantly related to food expenditure.…”

“…Income is one factor that impacts housing expenses (Manajit et al, 2020;Wahab et al, 2018;Rashid et al, 2018;Mien & Said, 2018;Eichholtz & Lindenthal, 2014). However, the influence of income on housing expenditure is not well established.…”

“…However, the influence of income on housing expenditure is not well established. A study by Mien & Said (2018); Rashid et al (2018) found that an increase in total income negatively affects housing expenditure. However, an increase in income positively impacts housing expenditure (Manajit et al, 2020;Wahab et al, 2018;Eichholtz & Lindenthal, 2014;Chitnis & Hunt, 2011).…”

“…Household income is a factor that directly impacts transportation expenses (Chitnis & Hunt, 2011;Manajit et al, 2020;Mien & Said, 2018;Ong et al, 2008;Ozer, 2003;Rashid et al, 2018;Wahab et al, 2018). An increase in income was found to stimulate transportation expenditure.…”