Household expenditure on food at home in Malaysia

This paper analyses the food expenditure patterns of different income groups and the relationships between household characteristics and expenditure patterns in Malaysia. Rising income is expected to lead to a diversification in consumption patterns, as staple foods like rice are replaced by higher value grain based foods like wheat and wheat-based products. Malaysia is thus more likely to experience similar changes in food consumption patterns as those in the developed Asian countries of Japan and Taiwan. Consequently, it is important to understand what may happen to food demand, and its composition, and the potential changes in the domestic food economy.

The paper compares expenditure allocation by Malaysian households at different income levels and finds variations in terms of allocation of the food budget across expenditure quartiles in 2004/2005. Lower income groups allocated up to a third of their total income to their food budget while higher income groups recorded a lower expenditure share of income on food.These results are a reflection of “Engel’s law” that the share of household expenditure on food typically falls as income and expenditure increase suggesting that higher income groups allocate a smaller budget share for food than lower income groups.