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.
Compared to Pahang and Kelantan, Terengganu has 5 equation systems with their significant variables at 99%, 95% and 90%. Most of t-values for Equation 1 in Terengganu are significant at 0.01. There is positive relationship between INC and endogenous variable, EXTO. In contrast to the case of Pahang and Kelantan in Terengganu the relationship between income and total expenditure is not significant. The highest value in TBL (Total Borrowing Loan), means that Terengganu household tend to spend more money by making loan even though they have insufficient income. It means that in Terengganu, income does not contribute to the expenditure pattern among the households. Nevertheless, there are three independent variables that have strong relationships with EXTO at significant level at 0.05 and 0.01, identified as EXE (expenditures for education), INC (Income), HLO (Housing Loan), and lastly ALO (Automobile Loan).
Next, for Equation 2, the endogenous variable, INC has highly correlated to the four exogenous variables such as EXTO, FSA, AGE (Age) and DEP at 0.01 and 0.05 level of significant. Compared to Pahang and Kelantan, Terengganu has shown strong relationship between INC and AGE because as their age increases they become less productive and to less contribute to the job market. Furthermore, after their pension period, their income is not sufficient to support their family members. This could be possible explanation for the negative relationship between INC and AGE.