Household consumption and indebtedness: Are there disparities between genders, rural–urban areas, and among income groups?
Vol. 16, No 3, 2023
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Zun Yuan Wong
Universiti Malaysia Terengganu Kuala Terengganu, Malaysia. E-mail: wongzunyuan@gmail.com ORCID 0000-0001-8216-5092
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Household consumption and indebtedness: Are there disparities between genders, rural–urban areas, and among income groups? |
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Suhal Kusairi
Universitas Telkom Bandung, Indonesia. E-mail: suhalkusairi@telkomuniversity.ac.id ORCID 0000-0002-9156-6741 Zairihan Abdul Halim
Universiti Malaysia Terengganu Kuala Terengganu, Malaysia. E-mail: zairihan@umt.edu.my ORCID 0000-0003-0595-376X |
Abstract. Recently, household debt has been steadily increasing across the globe. Household consumption is an essential factor in household debt, along with households' characteristics, such as their location, the gender of the household head, and their income group. Therefore, this research investigates the disparities in the impacts of households' characteristics on their indebtedness and consumption. The study utilizes the Household Expenditure and Income Survey conducted in 2019 by the Department of Statistics of Malaysia, which included a simple random sample of 4,730 households. A simultaneous equations model is the employed method of analysis, and the results reveal that the gender of the household head, residential areas, and income groups have differential effects on household consumption and indebtedness through predetermined variables. Specifically, results show that indebtedness has a negative effect on household consumption for the middle-income group (M40); savings are negatively associated with consumption for households living in rural areas and the M40 group. Furthermore, income is positively associated with consumption for rural households and when the household head is female. Finally, household size also has a positive effect on consumption. |
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Received: March, 2023 1st Revision: August, 2023 Accepted: September, 2023 |
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DOI: 10.14254/2071-789X.2023/16-3/2 |
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JEL Classification: D12, E21, G51 |
Keywords: household indebtedness, household consumption, simultaneous equation model, household characteristics, microdata |
