A Descriptive Analysis on the Basic Needs Budget by the Middle Income Earners to Identify the Most Expensive City to Live: An Analysis Involving Capital Cities in Malaysia

Abstract

This paper estimated the basic needs budget of middle income earners in the three capital cities in Malaysia. Three states with high cost of living have been chosen by running analysis of variance, namely Penang, Kuala Lumpur and Johor to represent the northern, central and southern regions, respectively. This study focused on 3 capital cities in selected states (George Town, Kuala Lumpur and Johor Baharu) and used teachers as a benchmark for the middle income group who earned from RM2,992.50 to RM8,999 in 2014. From descriptive analysis, the basic needs budget in the 3 capital cities ranges from US$1,090.52 to US$1,413.86 a month for one-working and two-working parent. Based on the analysis provided, single-adults household have to spend US$608.35 to US$696.74 a month for basic needs. The results also revealed that there is surplus income that range from US$257.77 to US$429.55 a month in the 3 capital cities for single-adult household. However, the result is a contra with oneworking parent household where they suffer from budget deficits as much as US3.31 a month, and Johor Baharu face greater effect on the high cost of living. Meanwhile, two-working parent household manage to have surplus income after adding in their spouse income which ranges from US909.12 to US$1,223.03 a month. The descriptive analysis also revealed that the basic needs budget is allocated more towards housing and electricity, transportation and food in 3 capital cities in this study. Finally, we conclude that Johor Baharu capital city is the most expensive city to live, followed by Kuala Lumpur and George Town.
Keywords: basic needs budget, cost of living, middle income, standard of livin