HOUSEHOLD CONSUMPTION AND INDEBTEDNESS: ARE THERE DISPARITIES BETWEEN GENDERS, RURAL– URBAN AREAS, AND AMONG INCOME GROUPS?
HOUSEHOLD CONSUMPTION AND INDEBTEDNESS: ARE THERE DISPARITIES BETWEEN GENDERS, RURAL– URBAN AREAS, AND AMONG INCOME GROUPS?

Summary/Abstract: Recently, household debt has been steadily increasing across the globe. Household consumption isan essential factor in household debt, along withhouseholds' characteristics, such as their location, thegender of the household head, and their income group.Therefore, this research investigates the disparities in theimpacts of households' characteristics on theirindebtedness and consumption. The study utilizes theHousehold Expenditure and Income Survey conductedin 2019 by the Department of Statistics of Malaysia,which included a simple random sample of 4,730households. A simultaneous equations model is theemployed method of analysis, and the results reveal thatthe gender of the household head, residential areas, andincome groups have differential effects on householdconsumption and indebtedness through predeterminedvariables. Specifically, results show that indebtedness hasa negative effect on household consumption for themiddle-income group (M40); savings are negativelyassociated with consumption for households living inrural areas and the M40 group. Furthermore, income ispositively associated with consumption for ruralhouseholds and when the household head is female.Finally, household size also has a positive effect onconsumption.

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