A Conceptual Framework of Smart Consumption to Elevate B40 Household Financial Well-being
Muhammad Amir bin Saharuddin* (a), Hway-Boon Ong (b), Lee-Lee Chong (b)

Faculty of Management, Multimedia University, 63100 Cyberjaya, Malaysia
*mmu.edu.my

Abstract

The Malaysian household is classified into three categories, the bottom 40 per cent (B40), the middle 40 per cent (M40) and the top 20 per cent (T20) households (Department of Statistics Malaysia, 2020). The 2019 data from the department revealed that B40 households experienced a slower growth in income as compared to the M40 households. A long-term disproportion of income has a negative cyclical effect for the B40 households. This paper will propose a conceptual framework of smart consumption to elevate the B40 household^s financial well-being. The incentive effect, a contemporary argument, explains how intrinsic and extrinsic incentives affect an individual^s decision. Based on the Incentive Effect hypothesis, the theoretical framework of this study is established. Data will be collected in 3 cities in the Klang Valley, namely, Kuala Lumpur, Shah Alam and Petaling Jaya. The B40 respondents will be surveyed on their earning capabilities, consumption pattern and payments habits in selected shopping marts such as Econsave, 99 Speedmart, and Tesco. While long term plan of accessibility to education and training is vital, a short term solution of smart consumption may elevate the B40 household financial well-being instantaneously.

Keywords: B40, Smart consumption, Financial Well-being

Topic: Economics