The Social Sciences

Year: 2016
Volume: 11
Issue: 11
Page No. 2760 - 2768

Consumption Patterns in Malaysia Using Generalized Linear Model

Authors : Ros Idayuwati Alaudin, Noriszura Ismail, Zaidi Isa and Nuraidawani Mat Nasir

Abstract: Household expenditure is important as an indicator to financial stability of household in a country. According to economic theory, well-being is measured better by expenditure rather than by income. In general, there are various factors affecting household expenditure patterns including income, demographic and socioeconomic characteristics of each household. Therefore, this study investigates the relationship between the demographic and socioeconomic characteristics with household expenditure using Malaysian Household Expenditure Survey (HES) 2009/10 data which is based on 6480 sample of households and contains information on demographic and socioeconomic status of each household. Furthermore, we also examine household expenditure patterns according to expenditure classes which are classified into three groups; low, medium and high class expenditure. In addition, we explore the allocation of consumption expenditure of preretirement household (working household) and postretirement household (retirees)across several expenditure categories. Regression analysis with lognormal distribution and Generalized Linear Model (GLM) with Inverse Gaussian and Gamma distributions are performed to discern the effects of the demographic and socioeconomic characteristics on household expenditure patterns. The results show that GLM with Gamma distribution model is the best model followed by GLM with Inverse Gaussian distribution and multiple linear regression with lognormal distribution.

How to cite this article:

Ros Idayuwati Alaudin, Noriszura Ismail, Zaidi Isa and Nuraidawani Mat Nasir, 2016. Consumption Patterns in Malaysia Using Generalized Linear Model. The Social Sciences, 11: 2760-2768.

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