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An Economic Analysis of Cost of Living and Basic Needs Budget in Malaysia
Poster Title: An Economic Analysis of Cost of Living and Basic Needs Budget in Malaysia
Submitted on 11 Sep 2017
Author(s): Rusli Latimaha
Affiliations: School of Social Sciences, Universiti Sains Malaysia
This poster was presented at Universiti Sains Malaysia - International Conference on Social Sciences
Poster Views: 1,820
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Poster Information
Abstract: The study has investigated the main factors influencing the cost of living and basic needs budget of middle income in three selected capital cities in Malaysia. The ARDL Bounds test results show that there is a long-run relationship between the cost of living and explanatory variables such as gross domestic product per capita, population growth, unemployment rate and degree of openness in Malaysia. Other than that, the Granger causality test indicates that there is an evidence of unidirectional Granger causality between cost of living and standard of living in Malaysia. Besides, the average cost of living a month for single-adult is RM2,908.88 a month, RM5,026.72 a month for one-working parent, and RM5,215.27 a month for two-working parents. Moreover, the study also shows that the household income, family size, the age of head household, sex ratio, the number of rooms, electrical appliance usage costs, broadband subscribers and number of private cars are the significant factors influencing the basic needs budget of the middle-income earners in the three capital cities in Malaysia. Based on empirical results, the government advised to control the outflows of Ringgit Malaysia that contributed to the deterioration of purchasing power of households. Increase the disposable income of middle-income group by increased the amount of cost of living allowances or revise the civil servant’s salary scheme is highly suggested. The government and private sector must enhance their cooperation in order to provide goods and services at lower prices and practically affordable by focusing on housing price regulation. Moreover, to enhance the agricultural sector, monitoring and enforcement of price efficiently, upgrade subsidy delivery system which able to minimize the household expenditure and cost of living. Lastly, adjustment to the consumer price index weighted must be done and introduce a new component such as child care. Summary: This poster describes the factors influencing the cost of living and basic needs budget in Malaysia. The analysis begins at the macro level to the household level in order to answer the issue, which is what are the factors influencing the cost of living and basic needs budget and how much income that households needed in order to accommodate their basic needs. References: Allegretto, S. A. (2006). Basic family budgets: Working families’ income often fail to meet living expenses around the United States. International Journal of Health Services, 36(3), 443 - 454.

Cebula, R.J. & Todd, S. (2004). An empirical note on determinants of geographic living-cost differentials for counties in the state of Florida 2003. The Review of Regional Studies, 34(1), 112 - 119.

Cebula, R.J. & Toma, M. (2007). An empirical analysis of determinants of interstate living-cost differentials 2005. The Journal of Regional Analysis and Policy, 38(3), 222 - 228.

Deaton, A., Ruiz-Castillo, J. & Thomas, D. (1980). The influence of household composition on household expenditure patterns: Theory and Spanish evidence. Journal of Political Economy, 97(1), 179 - 200.

Fisher, G.M. (2012). Standard budgets (Basic needs budgets) in the United States since 2006. United States Census Bureau.

Fisher, P.S. & French, L. (2014). The cost of living in I
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