Archive for February, 2014

Table 4 above show the relationship between mean income and mean total expenditure for the three states. Refer to the Table 4, the mean income is directly proportional to and has positive relationship with the total expenditure. In other words, an increase in income will increase the total expenditure as well. Therefore, it is clear that total expenditure is influenced by income of the household. On the average the amount of total expenditure for Pahang is highest and for Kelantan it is the lowest. As the proportion of expenditure in Kelantan is about 68.4 to 69.1 percent of that of the state of Pahang and apparently as Kelantan total income increases relative to Pahang the proportion of spending for the state gradually rises. In Terengganu the proportion of total expenditure in relation to Pahang is higher at lower income that is 91-92 percent for income groups RM 200-600 per month. This table seems to decline to 88-87 percent as total income rises to RM2000-2400 per month in Terengganu.
Read the rest of this entry »

EMPIRICAL MODEL FOR EAST COAST OF PENINSULAR MALAYSIA HOUSEHOLD EXPENDITURE: INCThe findings in Kelantan are more or less similar to that of Pahang whereby the TBL Total Borrowing Loan (TBL) shows the highest =0.6831. Most of t-values for Equation 1 in Kelantan are significant at 0.05 and 0.01. There is positive relationship between INC (income) and endogenous variable, EXTO (Expenditures Total) and the relationship is positive. Besides of income, there are three other independent variables that have strongly relationship with EXTO, which identified as expenditures for education (EXE), housing loan (HLO), and lastly the automobile loan (ALO).
Referring to the Equation 2, there is also the same findings as in Equation 1 whereby endogenous variable, INC have strongly relationship (0.05 and 0.01 level of significant) with five exogenous variables such as EXTO, FSA (Family Size), DEP (Dependent), DSE (Dummy for Self Employment) and DUE (Dummy for Unemployment). Based on these findings, the number of family members and the number of dependents in the family strongly contributed to the level of income. In addition, the dummy for self employment or unemployment of the household has shown possible impact on the level of income as a whole.
Read the rest of this entry »

In general, varies widely with the lowest being 0.3 and the highest 0.9. The lowest range is still acceptable because the study uses the cross-sectional data. Based on the result of 2SLS analysis, there are 8 simultaneous equation systems estimated for the state of Pahang.
Most of t-values for Equation 1 in Pahang are significant at 0.01 and 0.05 probability levels. There is positive relationship between INC (income) and EXTO (total expenditure) whereby the EXTO is used as an endogenous variable. As noted a one percent (1%) increase in income necessitates an increase of 0.21 percent in the total of expenditure (refer to Equation 1). This scenario is consistent with the Engel Theory, whereby an increase in income would generate a less then unity on food and as income further increases lesser proportion of income will be spent on food items. For rural community of the East Coast which include Pahang a large proportion of their income and expenditure is mostly allocated for food (see Equation 2). This positive relationship between income and total expenditure is expected and is in constant with the microeconomic theory. This means that as household income level rises it influences the spending behavior of the households. On the other hand, an increase in EXTO will have an impact on the household income the magnitude of which is 0.71 and is highly significant at 0.01 probability level. This implies if total expenditure were to increase by 1 percent the household will have to increase higher, that is by 0.71 percent (refer to Equation 2). In order to spend more the household will have to work extra time to obtain much higher income.
Read the rest of this entry »

EMPIRICAL MODEL FOR EAST COAST OF PENINSULAR MALAYSIA HOUSEHOLD EXPENDITURE: Emprical Research'sThe structural equations presented here are in general forms to differentiate between endogenous variables denoted by Yik for i=1, 2,…, p endogeous variable types and k=1, 2,.., m number of endogenous variables used in the model and the exogenous variables denoted by Xlj for l= 1, 2,…, q number of endogenous variables and j=k+1, k+2,…, k+n number of exogenous variable types in the model. the definitions of the variables used in the analyses are also provided to assist readers to refer to the actual variables names as presented in the tables.
The system of the income and expenditure structural equations for identification.
According to the previous studies, most of the researcher like Paulin, Yen and Jensen, Paulin, Newman et. al and Yin et. al used the age, sex, maritial status and education level as the variables to represent individual characteristics. While, for the characteristic of households’ variable, most of the researcher used the households’ numbers and the age level.
Read the rest of this entry »

The variation in expenditure and spending among households will eventually affect differences in lifestyle. Economic impact of this different lifestyle will exacerbate and widen the income disparity between rich and poor households. Household expenditure and income disparity can lead to significant differences in either rural or urban location in terms of their expenses on basic needs. The urban household tends to increase their consumption based on the level and increment of their income in order to improve their lifestyle. While, Micheal Beine et. al, disclosed their findings whereby the household in United States prefer to spend their money at shopping centre rather than choose their leisure time for other activities.
According to the above problem statement, the East Coast of Peninsular Malaysia, which is represented by Pahang, Terengganu and Kelantan will be selected as research area for the current study. A random sample of household of each state will be selected for the analysis. The study is intended to investigate changes in household’s consumption and their spending priorities interchangeably with income during the economic crisis.
Read the rest of this entry »

EMPIRICAL MODEL FOR EAST COAST OF PENINSULAR MALAYSIA HOUSEHOLD EXPENDITURE: IntroductionIn development plan provision society, household spending pattern were important in order to understand society standard of living. To fulfill the basic need like food, clothing, accommodation and so on, each household’s must be efficient in managing their needs parallel to their income level. Based on reported by Van Raaij & Henk J. Gianotten, household income and attitude and expectation determine consumer expenditure, saving and credit at the aggregate level. Economic growth in Malaysia had increased the income level by the household, however with changing global economy have resulted with inflation and increase in family expenses. Malaysian had just experienced increases in food and petroleum prices therefore, it is important to understand how far they spend their money wisely in a situation of global economic changes.
Read the rest of this entry »

The purpose of the research methodology is collecting and processing the data correctly, and also achieving to reliable results. This part of the paper explains main of question research, purpose of study, scope of study, and methodology.
There are different measures for evaluating of company performance. Economic value added (EVA) is one of the most important measures for evaluation of company performance. The main research question is: which of Accounting measures (ROE and ROA) and economic measures (EVA, REVA, and EVA momentum) have a greater relationship with stock return in Bursa Malaysia? So, the purpose of the study is to examine the relationship between EVA, REVA, EVA Momentum, ROA, and ROE with stock return in Bursa Malaysia.
We will choose the public companies accepted in Main market of Bursa Malaysia. The sample of the companies include most companies listed in Bursa Malaysia (and wich data available) over the period 2001 – 2010. The historical or secondary data will comprise companies’ financial statement and will use to calculate EVA, REVA, EVA momentum, ROA, and ROE. The data will abstract from the income statement, balance sheet, and financial highlits, available from KLSE RIIAM information system (KLSE-RIS) website, Bursa Malaysia website, Universiti Malaya (UM), and Universiti Potra Malaysia (UPM). Klse RIS is considered as the major of data for the study since most of the data is available from their website. The daily share price of the companies will base on Bursa Malaysia’s trading closing price. This information is drawn from the Hydrasystem available online at the library of Universiti of Malaya, Kuala Lumpur.
Read the rest of this entry »

EVALUATION OF COMPANY PERFORMANCE WITH ACCOUNTING AND ECONOMIC CRITERIA: HypothesisThe following hypothesis is proposed to test the validity of the model:
1.    There are positive relationship between economic measures and stock returns.
a.    There are positive relationship between EVA and stock returns.
b.    There are positive relationship between REVA and stock returns.
c.    There are positive relationship between EVA Momentum and stock returns.
2.    There are positive relationship between accounting measures and stock returns.
a.    There are positive relationship between ROA and stock returns.
b.    There are positive relationship between ROA and stock returns.
Read the rest of this entry »

“EVA Momentum is a registered trademark of EVA Dimensions. In 2009 EVA Momentum emerged as the newest EVA-related business performance measure”(Mahoney, 2011). Stewart stated that EVA Momentum is “the one ratio that tells the whole story”. Colvin stated in Fortune that “savvy investors and managers will focus on EVA Momentum”. “EVA Momentum has not been empirically investigated in any known previous study” advanced earlier EVA work by introducing EVA Momentum as a new measurement tool. Stewart described EVA Momentum as the increase or decrease in economic profit divided by prior period sales. Stewart described EVA Momentum as an economic measure that is the size and situation neutral, provides trend warnings, and is —market-calibrated. In contrast to Kaplan and Norton, who stated no single measure is adequate to measure business performance; Stewart argued EVA Momentum is the single best performance measurement tool. EVA Momentum attempts to address the weaknesses in sales growth rate, EPS, market share, profit margin, return on capital, and other measures. EVA Momentum considers year-over-year changes in economic profit as measured by EVA, relative to prior year sales. This methodology allows for measurement of the change in a firm’s economic performance relative to the firm’s baseline sales. Stewart claimed that stating EVA Momentum as a percentage of sales facilitates performance comparisons across company size and industries.
Read the rest of this entry »

EVALUATION OF COMPANY PERFORMANCE WITH ACCOUNTING AND ECONOMIC CRITERIA: Refined Economic Value AddedFrom the point of view of the participants at the economic life of the firm, and especially from the management; EVA gives explanations for the results obtained after applying a strategy or permits the comparison of results obtained with those that were at the strategy selection basis in the past, the viability of a strategy from the point of view of the economic and financial results expected in the future, so it can be a good criterion for selecting strategies.
From the potential investors’ point of view; EVA assures them regarding the fair price payment for the purchased shares and the maintenance of the future development potential of the enterprise according to the historical period trend; lastly from the creditors’ point of view it provides information regarding the credit amounts repayment and remuneration capacity of the firm.
The only cost of debts is calculated in calculating accounting profit, and cost of funds provided by shareholders is not calculated by the managers. But the concept of economic value added (EVA) calculates the cost of equity due to each fund have cost, and money does not come into the company itself. In the other words, the economic value added (EVA) is predicted from economic profit and it has different with accounting profit. Economic value added (EVA) causes that accounting profit closer to economic profit and evaluation of created value for shareholders is easier. Weaver believed that EVA is the lost ring between shareholder returns, economic returns, and accounting returns.
Read the rest of this entry »

Get Started Now!

Copyright © 2013 - 2019 Real Time Economics. All rights reserved

Home | Site Map | Contacts