Professional Documents
Culture Documents
FEP 1988 6
HOUSEHOLD INCOME, CONSUMPTION AND SAVING BEHAVIOUR:
A CASE STUDY OF TWO RURAL DISTRICTS IN MALAYSIA
By
October 1988
ACKNOWLEDG»tENTS
Bagan Datoh in Perak, and Parit Raja and Rengit in Johor, for
their help and support in the survey work carried out in the
for financing the survey work in both areas of study under the
Without this support, the study would not have been possible.
ii
I am greatly indebted to my wife, Aliyah, for her
close associate, for his views and assistance, and to those who
iii
PERPUSTAKAAN
UNIVERSITI PERTANIAN MALAYSIA
TABLE OF CONTENTS
Page
ACKNOWLEDGEMENTS ii
ABSTRACT xi
ABSTRAK xiv
iv
Page
Sources of Income • • • . . . . . . 35
Household Expenditure 41
Definition of Saving 48
Theories of Saving 49
Curren t Income . . . . . . 63
Permanent Income 68
Wealth . . . . . . . . . . . . . . 72
Sources of Income . . . 76
v
Page
Role of Expectation . . . . . . . . . . . . . . . . . 81
Farm Size . . . . . . . . . 88
Sources of Income . . . . . . . . . 88
Dependency Ratio . . . . . . . . . 90
Household 101
Income . . 101
Consumption 102
vi
Page
Introduction . . . . . . . . . . . . . . . . . . . . 103
Consumption . . . . . . . . . . . . . . . . . . . . . 1 27
Saving . . . . . . . . . . . . . . . . . . . . . 129
Test of Hypotheses • • . . . . · . . . . . . · . . . . 1 29
Conclusions . . . . . . . . . . . . . . . . . . . . 1 34
BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . 136
APPENDICES
A Maps . . . . . . . . . . 1 45
B Questionnaire . . . . . . . . . . . . . 149
vi i
LIST OF TABLES
Table Page
viii
Table Page
ix
Table Page
x
Abstract of the thesis presented to the Senate of Universiti
Pertanian Malaysia in partial fulfilment of the requirements
for the degree of Master of Science
by
OCTOBER 1988
xi
analysis by regression was carried out using consumption models
income .
xii
government involvement in agricultural development can be
xiii
Abstrak tesis yang dikemukakan kepada Senat Universiti
Pertanian Malaysia sabagai memenuhi sebahagian daripada
keperluan bagi penganugerahan ijazah Master Sains .
Oleh
OKTOBER 1988
bandar.
xiv
Untuk mempastikan keadaan sebenar, kajian ini dibuat un�uk
xv
Pendapatan isirumah bergantung sebahagian besar kepada
bertambah penting.
sektor berkenaan .
xvi
CHAPTER ONE
INTRODUCTION
people.
1
2
(b) the willing ness to save, and (c) the ability to save on the
per annum despite the setbacks due to the oil crisis in 1972-73
were below the poverty line . By 1984 , this figure had improved
the inc idence of poverty exi sts in all racial groups across all
and fishermen.
Table 1
1 2 3
1970 1976 1984
Stn.blm 'l'btal Total POcx Inc:1.deaoa Total Total PQoc Inc:Ldenoa Total Total PQoc IncldenOll
Bousebolda Bouseholds of Poverty Bouseholds Households of Poverty Households Households of l'OYeI.-ty
('000) ('000) ('> ('000) ('000) (,) ('000) ('000) (')
Rural 1203.4 705.9 58.7 1440.8 669.6 47.8 1629.4 402 24.7
Rubber _llho1dan 350.0 226.4 64.7 126.7 73.8 58.2 155.2 67.3 43.4
PaW. famers 140.0 123.4 88.1 187.9 150.9 80.3 116.6 67.3 57.7
Estate worIten 148.4 59.4 40.0 81.3 16 19.7
Fisbenasn 38.4 28.1 73.2 28 17.6 62.9 34.3 9.5 27.7
Coocnut smallholders 32.0 16.9 52.8 19.3 12.4 64.2 14.2 6.6 34.2
other agriollture 144.1 128.2 89.0 528.4 275.4 52.1 464.2 158.8 34.2
ot:hsr inlustries 350.5 123.5 35.2 510.5 139.5 27.3 163.6 76.5 10.0
Urban 402.6 85.9 21.3 530.6 94.9 17.9 991.7 81.3 8.2
AgricW.tural 24.8 10 40.3 37.5 8.9 23.7
Mining 5.4 1.8 33.3 4.5 0.5 11.1 7.8 0.3 3.8
H<lnlfactud.Jl'l 84.0 19.7 23.5 55.3 9.5 17.2 132.3 11.3 8.5
Oonstruction 19.5 5.9 30.3 34.7 6.1 17.6 86.6 5.3 6.1
'l'ranspart and utili ties 42.4 13.1 30.9 53.2 9.1 17.1 73.9 2.7 3.7
Trade and servioee 251.3 45.4 18.1 242 33.7 13.9 472.7 21.9 4.6
Activities nat adequately define 116.1 26 22.4 180.9 30.9 "17.1
------ ---------------------------------------------------------------- -- ------------------------------ - --------
Total 1606.0 791.8 49.3 1931.4 164.4 39.6 2621.1 483.3 18.4
(Source: Departmen t of Statistics, Post I'!ntm!ration Survey (PES) of the Population CensuB, 1910, AgricW.tural Census, 1977 and Ib.Bebold Incx:ma Survey, 1984.)
basis , it has been reported that under current price level , the
Plan , 1986a) .
with that realisation , the Government has given due att ention
.......
(Sources: Government of Malaysia, Fourth Malaysia Plan and Fifth Malaysia Plan Report).
and $4 .87 billion (22%) during the First , Second and Third
period .
1
The total expenditure incurred by the government for rural
development and agriculture decreased from $1. 718 bile in
1982 to $1 . 258 bile in 1984 . The revised allocation for the
Ministry of Agriculture for the Fifth Plan was $1 .842 bile
compared to the original of $3.368 bile approved . ( Extracts
from a monograph on expenditure for rural development and
agriculture , Economic Planning Unit , Malaysia , 1988)