Publication: Financial Vulnerability and Its Determinants: Survey Evidence from Malaysian Households
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Date
2019
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Journal ISSN
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Publisher
Routledge Journals, Taylor & Francis Ltd
Abstract
The level of Malaysian household debt remains high, currently among the highest in Asia, raising concerns about its sustainability. This article analyzes the prevalence of financial vulnerability, measured by consumers' inability to meet their household needs, to cope with unexpected expenses, and to survive in the event of a crisis. Analysis of a dataset of 902 respondents generally suggests that the risk of financial vulnerability in the event of economic or financial shocks is growing. In addition, in an ordered probit model, the significant determinants of financial vulnerability are income level, marital status, age, level of education, and financial behavior in money management. Those who are most financially vulnerable are younger people who have a lower education level and whose financial behavior leads to poor money management.
Description
Emerging Markets Finance and Trade, Volume 55, Issue 9
Keywords
financial vulnerability, household debt, Malaysia, non-linear principal component analysis, ordered probit, survey data