Household Income, Consumption and Saving Behaviour: a Case Study of Two Rural Districts in Malaysia
The incidence of poverty resulting from low income has been a persistent phenomenon in Malaysia, particularly in the rural areas. The problem is markedly prevalent among the smallholders' sub-sector involved in padi, rubber, coconut and fishing activities. As a result, there is a widespread...
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| Format: | Thesis |
| Language: | English English |
| Published: |
1988
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| Subjects: | |
| Online Access: | http://psasir.upm.edu.my/id/eprint/8015/1/FEP_1988_6_.pdf |
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| Summary: | The incidence of poverty resulting from low income has
been a persistent phenomenon in Malaysia, particularly in the
rural areas. The problem is markedly prevalent among the
smallholders' sub-sector involved in padi, rubber, coconut and
fishing activities. As a result, there is a widespread belief
that the rural households have very low propensity to save,
and this limits the accumulation and availability of financial
resources in this sector.
This study i s conducted to examine the overall perspective
related to income, consumption and saving of the rural
households, with the main objective to determine with certainty
the capacity to save prevalent among the households. Primary
data were collected from specific areas of study and detailed analysis by regression was carried out using consumption models
to determine the influence of such variables as farm sizes,
dependents and sources of income on household consumption. From
the results, inferences were drawn to explain household saving
behaviour, while simultaneously comparing the findings with
other studies in similar field, inside and outside the country.
The result shows that there i s a strong capacity among the
rural households to save their income. The analysed MPS lies in
the region of 0.1 to 0.4 with the higher value prevalent among
higher income families , especially those with bigger farm
sizes. Low income families have to meet their basic consumption
requirement for food, clothing and children education, causing
the MPS to decline.
Farm income constitutes the most important component of
total household income and its size is significantly influenced
by the size of farms and the types of cultivated crops.
Households owning smaller farms are observed to rely heavily on
non-farming activities to supplement their total household
income.
The findings of the study can be used as a guide for the
formulation of rural development policy, particularly with
respect to project financing and mobilisation of funds. With
proper incentives and facilities, the target of reducing government involvement in agricultural development can be
achieved, while at the same time, paving the way to encourage self-reliance among the smallholders sub-sector. |
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