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Jurnal Ekonomi Malaysia

54 (1) 2020 111 – 120

Household Debt and Household Spending Behavior: Evidence from Malaysia
Hutang Isi Rumah dan Tingkah Laku Perbelanjaan Isi Rumah: Bukti dari Malaysia

Department of Economics
International Islamic University Malaysia
P.O. Box 10, 50728 Kuala Lumpur
MALAYSIA

caiyunchao@gmail.com

Department of Economics
International Islamic University Malaysia
P.O. Box 10, 50728 Kuala Lumpur
MALAYSIA

selamah@iium.edu.my

Department of Economics
International Islamic University Malaysia
P.O. Box 10, 50728 Kuala Lumpur
MALAYSIA

ruzita@iium.edu.my

Department of Economics
International Islamic University Malaysia
P.O. Box 10, 50728 Kuala Lumpur
MALAYSIA

ma.nahar@iium.edu.my

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.

Keywords

consumption loan; Household debt; investment loan; Malaysia; spending cut
http://dx.doi.org/10.17576/JEM-2020-5401-8
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Yunchao, , Abdullah Yusof, , Mohd Amin, , & Mohd Arshad, (2020). Household Debt and Household Spending Behavior: Evidence from Malaysia. Jurnal Ekonomi Malaysia, 54(1), 111–120. http://dx.doi.org/10.17576/JEM-2020-5401-8

@article{yunchao2020household,
  title={Household Debt and Household Spending Behavior: Evidence from Malaysia},
  author={Yunchao, Cai and Abdullah Yusof, Selamah and Mohd Amin, Ruzita and Mohd Arshad, Mohd Nahar},
  journal={Jurnal Ekonomi Malaysia},
  volume={54},
  number={1},
  pages={111—120},
 

year={2020},
}

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