Modelling the Determinants of Malaysian Household Debt

Hafizah Hammad Ahmad Khan, Hussin Abdullah and Shamzaeffa Samsudin
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Hafizah Hammad Ahmad Khan: School of Economics, Finance and Banking, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia,
Hussin Abdullah: School of Economics, Finance and Banking, Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia,

International Journal of Economics and Financial Issues, 2016, vol. 6, issue 4, 1468-1473

Abstract: This paper explores the determinants of household debt composition in Malaysia. By utilizing the bound test and autoregressive distributed lag modelling approach, findings of this study reveals that in the long run period, a change in income level, housing price and population would have a positive impact on mortgage debt while rise in interest rates and cost of living would exert a negative influence. In addition, findings of this study supported that the household uses the debt as a substitute for income to finance the rising consumption because of a higher living cost. Findings of this study could provide some guidance to policymakers in controlling the mounting debt level and help in realizing the nation economic goals.

Keywords: Household Debt; Mortgage Debt; Consumer Debt; Bound Test; Auto-regressive Distributed Lag Modeling (search for similar items in EconPapers)
JEL-codes: E00 E21 E31 E43 E51 G00 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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