Household debt and household spending behavior: evidence from Malaysia

Cai, Yunchao and Selamah Abdullah Yusof, and Ruzita Mohd Amin, and Mohd Nahar Mohd Arshad, (2020) Household debt and household spending behavior: evidence from Malaysia. Jurnal Ekonomi Malaysia, 54 (1). pp. 111-120. ISSN 0127-1962

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Abstract

Using data collected from urban households in the Klang Valley, Malaysia, this study examined the impact of household debt on urban household consumption decisions. The findings revealed that household debt does not generally affect consumption decisions, except in the case of expenditure on vacation, which tends to be reduced for households facing high levels of debt. Furthermore, general financial wellness tends to be the main factor affecting consumption rather than debt. Households with poorer financial wellness make more frequent cuts to daily meals, fruit, utility, transportation, clothing, medical care, vacations, and leisure activities. Although the impact of debt on consumption is not extensive, it must be closely monitored to ensure that the risk is contained and that the wellbeing of households is not adversely affected.

Item Type:Article
Keywords:Household debt; Spending cut; Investment loan; Consumption loan; Malaysia
Journal:Jurnal Ekonomi Malaysia
ID Code:15593
Deposited By: ms aida -
Deposited On:05 Nov 2020 01:45
Last Modified:09 Nov 2020 03:01

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