The Rising Cost of Living Among B40 Households in Penang State: Does Lifestyle Matter?

Nor Asmat Ismail
School of Social Sciences, Universiti Sains Malaysia


This paper analysed the consumption patterns exhibited by households in the state of Penang, Malaysia. The data were sourced from the Household Income and Expenditure Survey 2016 as obtained from the Department of Statistics Malaysia (DOSM). The consumption patterns of B40 households were compared to those of M40 households for the purpose of determining B40 household lifestyles in correlation to their rising cost of living. To this end, an estimation of income elasticities was made based on Engel curves and their quadratic function and by using the Almost Ideal Demand System (AIDS) methodology. The estimation method chosen was attributable to its consistency with the consumer utility theory. Consequently, the results revealed no significant difference in expenditure recorded between B40 and M40 households pertaining to the aspects of restaurant and hotel, furnishing, household equipment, routine household maintenance, and alcoholic beverages and tobacco consumption. Similarly, their spending on education, clothing and footwear, and health yielded no statistically significant difference, as well as in comparison with T20 households. According to this analysis, the lifestyle held by B40 households is similar to that of their M40 counterparts, which may be linked to the rising cost of living for a B40 household. Henceforth, the findings of this study will provide new information concerning the patterns of consumption and lifestyle held by B40 households. Such insight may prove to be useful for the government towards the planning and development of better support or policies for this particular demography in achieving betterment and well-being.

Keywords: Lifestyle, Consumption, Elasticity, Cost of living, B40 households