The Linkages between Household Consumption and Household Debt Composition in Malaysia
This study intends to examine the relationship between household consumption and household debt composition in Malaysia. Specifically, this study employs the Toda-Yamamoto non-causality test since it is suitable for variables with different levels of integration. Results obtained in this study sugg...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
EconJournals
2016-10-01
|
| Series: | International Journal of Economics and Financial Issues |
| Online Access: | http://mail.econjournals.com/index.php/ijefi/article/view/2773 |
| _version_ | 1828026824957886464 |
|---|---|
| author | Hafizah Hammad Ahmad Khan Hussin Abdullah Shamzaeffa Samsudin |
| author_facet | Hafizah Hammad Ahmad Khan Hussin Abdullah Shamzaeffa Samsudin |
| author_sort | Hafizah Hammad Ahmad Khan |
| collection | DOAJ |
| description |
This study intends to examine the relationship between household consumption and household debt composition in Malaysia. Specifically, this study employs the Toda-Yamamoto non-causality test since it is suitable for variables with different levels of integration. Results obtained in this study suggest that the direction of causality runs from consumption to debt. Moreover, the result of the cointegration test also supports that long run relationship exists between the two variables. It also supports the Life Cycle Model, which predicts that a household has been borrowing in order to finance their consumption and expenses. Therefore, this result indirectly suggests that the household has been depending on debt to finance their consumption and thus any negative shocks that occur in the economy can causes serious consequences on the economic performance of the country. Hence, any attempts by policymakers to control the mounting debt level should be focusing on restricting the supply of loans.
Keywords: Household debt, Consumption, Causality, Cointegration, Malaysia
JEL Classifications: E00, E21, E51
|
| first_indexed | 2024-04-10T13:26:26Z |
| format | Article |
| id | doaj.art-0036f555204b4804ba551c689c7870d1 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T13:26:26Z |
| publishDate | 2016-10-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-0036f555204b4804ba551c689c7870d12023-02-15T16:11:49ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382016-10-0164The Linkages between Household Consumption and Household Debt Composition in MalaysiaHafizah Hammad Ahmad Khan0Hussin Abdullah1Shamzaeffa Samsudin2School of Economics, Finance and Banking, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia.Associate Professor, School of Economics, Finance and Banking, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia.Senior Lecturer, School of Economics, Finance and Banking, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia. This study intends to examine the relationship between household consumption and household debt composition in Malaysia. Specifically, this study employs the Toda-Yamamoto non-causality test since it is suitable for variables with different levels of integration. Results obtained in this study suggest that the direction of causality runs from consumption to debt. Moreover, the result of the cointegration test also supports that long run relationship exists between the two variables. It also supports the Life Cycle Model, which predicts that a household has been borrowing in order to finance their consumption and expenses. Therefore, this result indirectly suggests that the household has been depending on debt to finance their consumption and thus any negative shocks that occur in the economy can causes serious consequences on the economic performance of the country. Hence, any attempts by policymakers to control the mounting debt level should be focusing on restricting the supply of loans. Keywords: Household debt, Consumption, Causality, Cointegration, Malaysia JEL Classifications: E00, E21, E51 http://mail.econjournals.com/index.php/ijefi/article/view/2773 |
| spellingShingle | Hafizah Hammad Ahmad Khan Hussin Abdullah Shamzaeffa Samsudin The Linkages between Household Consumption and Household Debt Composition in Malaysia International Journal of Economics and Financial Issues |
| title | The Linkages between Household Consumption and Household Debt Composition in Malaysia |
| title_full | The Linkages between Household Consumption and Household Debt Composition in Malaysia |
| title_fullStr | The Linkages between Household Consumption and Household Debt Composition in Malaysia |
| title_full_unstemmed | The Linkages between Household Consumption and Household Debt Composition in Malaysia |
| title_short | The Linkages between Household Consumption and Household Debt Composition in Malaysia |
| title_sort | linkages between household consumption and household debt composition in malaysia |
| url | http://mail.econjournals.com/index.php/ijefi/article/view/2773 |
| work_keys_str_mv | AT hafizahhammadahmadkhan thelinkagesbetweenhouseholdconsumptionandhouseholddebtcompositioninmalaysia AT hussinabdullah thelinkagesbetweenhouseholdconsumptionandhouseholddebtcompositioninmalaysia AT shamzaeffasamsudin thelinkagesbetweenhouseholdconsumptionandhouseholddebtcompositioninmalaysia AT hafizahhammadahmadkhan linkagesbetweenhouseholdconsumptionandhouseholddebtcompositioninmalaysia AT hussinabdullah linkagesbetweenhouseholdconsumptionandhouseholddebtcompositioninmalaysia AT shamzaeffasamsudin linkagesbetweenhouseholdconsumptionandhouseholddebtcompositioninmalaysia |