Consumption Patterns and Income Elasticities in Malaysia

The objective of this paper is to provide a more current and better understanding of expenditure patterns of the variety of consumption products and services for various groups of Malaysian society. The analysis focuses on differences in consumption across age groups, and identifies factors that affect the level of total expenditure as well as expenditure on specific consumption commodities. Estimates for income elasticities are computed to identify expenditure items as either luxuries or necessities. Differences with regard to an item being considered a necessity or a luxury are observed between urbanites and non urbanites, males and females, and married and non married individuals.