The impact of price change on consumer choice of automobiles

The objective of this paper is to examine whether a change in the price of a given model of national automobiles affects the choice of alternative car models by consumers. Four models of national automobiles - Saga 1.3cc, Saga 1.5cc, Wira 1.3cc, and Wira 1.5cc - are considered over the period 2000–2002. The results based on the conditional logit model indicate that all of the alternative models are substitutes to each other

The displaced plantation workers: A case study of rubber estates in Kedah

Eviction of plantation workers, due to the development of estate lands and changing land ownerships, has been a big and unresolved issue. Many plantation areas have been sold to make way either for housing projects or industrial sites. When an estate is sold, the estate workers lose not only their jobs, but also their homes and additional sources of income from farming and animal husbandry. They are also entitled to receive termination benefits. The majority of these displaced workers have skills only in the agricultural sector and many of them are old aged. The main objective of this study was to analysis the socioeconomic situations of the displaced workers due to the development of the rubber estate lands in Kedah. The snowball sampling method was used to identify the respondents. The survey was based on 11 estates and 349 ex-workers of these estates were interviewed. The areas of this study were in Sungai Petani and Kulim. The results clearly showed that the majority of the evicted workers migrated to locations that were on average around 3km from their original estates. The majority of them worked with private sector companies upon their evictions. However, many of them are still in their estate houses, waiting for better compensation to be paid in the form of new houses elsewhere. It is suggested in this paper that the compensation should be in terms of home ownership, provided jointly by the government and firms. There have also been some suggestions to solve the issue through programmes provided by the Ministry of Agriculture

An empirical study on fiscal sustainability in Malaysia

Fiscal sustainability has become a prominent issue in developing countries, and fiscal sustainability assessments have become an increasingly demanded component of macroeconomic analysis. Unfortunately, there is no single basic source of information on fiscal sustainability.Country economists who are new to fiscal sustainability analysis could rely on sample work by other economists and could delve into scattered journal articles for the theoretical background.This paper focuses on a particular country: Malaysia. The main purpose of this paper is to monitor fiscal sustainability in Malaysia using empirical analysis, and see whether the fiscal sustainability indicators are consistent with the co-integration framework. We employ VAR analysis as it is simple to compute and easily automated. We show how it is possible to analyze a change of policy within a VAR framework. We also use a Multivariate Co-integration Test methodology to conduct inference about the co-integrating relationship between fiscal sustainability indicators and output (GDP). Empirical validation from the time series analysis finds that fiscal sustainability indicators and Gross domestic Product (GDP) are co-integrated, which provides some support for the position that Malaysia’s fiscal sustainability is sustainable in the long run in sampling period.This finding suggests that the Government should improve the presentation of sustainability of fiscal policy and develop the analysis, review the sustainability indicators, and strengthen the role of the long term estimates in the design of short term fiscal policy

An investigation on trade openness, fiscal policy and economic growth in Malaysia: using an ARDL bounds testing approach

This study examines the impacts of trade openness and fiscal policy on economic growth in Malaysia between 1970 and 2003 using the autoregressive distributed lag (ARDL) approach and bounds test as proposed by Pesaran et al. (2001). Based on a structure consistent with the endogenous growth theory, the ARDL results show that, overall, trade openness and fiscal policy have strong positive impacts on economic growth in Malaysia over this period. This paper also develops a system instrumental variable method to estimate the structural speed of adjustment coefficient in an error correction model

Shock and economic growth in Malaysia

The objective of the study is to examine shocks and economic growth using an a-theoretical approach. An a-theoretical framework for studying shocks and economic growth was possible through the use of VAR method.We performed stationarity, causality and cointegration tests in order to achieve an appropriate model specification in estimating real relationships among the selected variables. The unitroot tests found that all except one of the variables were nonstationary and were integrated of order one, I(1).The Granger causality tests found broad money supply, real exchange rate and inflation were Granger caused by variables neither jointly nor individually.We implemented the Johansen cointegration procedure to test for cointegration.The test found one cointegrating relationships among the variables, which implied that the system was stable in one way.Based on the test results, a cointegrated VAR approach was used to analyse relationships among variables using the system’s responses to random shocks.This analysis formed the basis of discussion of the economic implications.This study found that fiscal policy did provide the necessary impetus to improve growth over the long term, but monetary policy did not result in the expected direction of effect.It was found that investment expenditure by government was sufficient to cause a significant long term economic growth. There was a lack of clarity on the effects of monetary policy changes as a result of dual objectives of the policy, price control and maintenance of the exchange rate.Given the lack of clarity, over emphasis on inflation control may not be desirable as a result of the constraint placed on economic growth. Additional insights on the effects of monetary policy are necessary through a detailed study using a similar empirical method.In addition, trade was found to be a significant source of economic growth.A focus of policy on trade development can be expected to contribute to economic development in the long term

Regional disparities, income inequality, and poverty: A cumulative causation from Malaysia's experience

Changes in economic structure are normally associated with an economy's transformation from an emphasis on agriculture to a more modern, more urbanized, and more industrially diverse manufacturing and services economy. Structural change refers to the relative importance of sectors in the economy such as production and factor use, increases in the rate of accumulation, shifts in the sectoral composition of economic activities (industrialization) focusing initially on the allocation of employment, change in location of economic activities (urbanization) and accompanying demographic transition, decreasing poverty, and inequality in income distribution

The Impact af a Price Change on Consumer Choice of Automobiles

This paper studies the impact of price change on the consumer choice of four selected automobiles in Malaysia: Saga 1.3cc, Saga 1.5cc, Wira 1.3cc, and Wira 1.5cc. The data were obtained from automobile reports compiled by the Malaysian Automotive Association (MAA), and analysed using the conditional and nested logit models. Our empirical analysis produced several key findings. Firstly, the sales of Saga 1.3cc appeared to be affected by  change in the price of Wira 1.3cc only, and vice versa. Secondly, the sales of Saga 1.5cc did not appear to be affected by change in the price of other models. Finally, the sales of Wira 1.5cc also did not appear to be affected by  change in the price of other models. Taken together, these results suggested that, except for Saga 1.3cc and Wira 1.3cc, there is little or no evidence that all of the car models under consideration are substitutes to each other in a pairwise comparison.

An Investigation on Trade Openness, Fiscal Policy and Economic Growth In Malaysia: Using an ARDL Bounds Testing Approach

This study examines the impacts of trade openness and fiscal policy on economic growth in Malaysia between 1970 and 2003 using the autoregressive distributed lag (ARDL) approach and bounds test as proposed by Pesaran et al. (2001). Based on a structure consistent with the endogenous growth theory, the ARDL results show that, overall, trade openness and fiscal policy have strong positive impacts on economic growth in Malaysia over this period. This paper also develops a system instrumental variable method to estimate the structural speed of adjustment coefficient in an error correction model.

The Displaced Plantation Workers : A Case Study of Ruber Estates in Kedah

Eviction of plantation workers, due to the development of estate lands and changing land ownerships, has been a big and unresolved issue. Many plantation areas have been sold to make way either for housing projects or industrial sites. When an estate is sold, the estate workers lose not only their jobs, but also their homes and additional sources of income from farming and animal husbandry. They are also entitled to receive termination benefits. The majority of these displaced workers have skills only in the agricultural sector and many of them are old aged. The main objective of this study was to analyse the socio-economic situations of the displaced workers due to the development of the rubber estate lands in Kedah. The snowball sampling method was used to identify the respondents. The survey was based on 11 estates and 349 ex-workers of these estates were interviewed. The areas of this study were in Sungai Petani and Kulim. The results clearly showed that the majority of the evicted workers migrated to locations that were on average around 3km from their original estates. The majority of them worked with private sector companies upon their evictions. However, many of them are still in their estate houses, waiting for better compensation to be paid in the form of new houses elsewhere. It is suggested in this paper that the compensation should be in terms of home ownership, provided jointly by the government and firms. There have also been some suggestions to solve the issue through programmes provided by the Ministry of Agriculture.