Analysis of Cost of Living in Malaysia: States and Urbanisation Comparison

Abstract

Malaysia is a growing nation with consistent income growth. Rising cost of goods and services, particularly for basic needs such as food, housing, and transportation, make the cost of living problem inevitable for Malaysian household. There is price difference between urban and rural regions, which raises the inquiry of the cost of living faced by households in the nation due to the urbanisation level. This research aims to analyse the household cost of living based on urbanisation while comparing the methodologies used to analyse the cost of living. The findings suggest that the cost of living for urban families is greater on basic needs spending than for those in medium and low urban states. However, there is no denying that low and medium urban states, such as Terengganu, Kelantan, Sabah, Sarawak, and Pahang, confront high basic need costs. Comparing analysis based on the consumer price index, the cost of living analysis based on microdata from the Malaysian Household Expenditure Survey 2016 may offer a more detailed figure. The research proposes that policymakers and government to pay attention to basic need expenditures, particularly housing since families in low, medium and high urban states spend much more on housing than on food and transportation.