The main objective of this study is to investigate the associations between financial knowledge, locus of control (LOC) and perceived financial wellbeing (FWB) with financial behaviour as a mediator among young adults from low-income households in Malaysia, controlling for education and income. The sample of this study consisted of 482 young adults from five different zones in Peninsular and East Malaysia, which were selected using a multi-stage sampling technique. Data were collected using a set of questionnaire-based surveys. The data were then analysed using Covariance Based Structural Equation Modelling (SEM). The study found that financial knowledge and external LOC as well as financial behaviour were significantly correlated with the perceived FWB of low-income young adults in Malaysia. The results also revealed that financial behaviour mediates the influence by financial knowledge and internal LOC on perceived FWB controlling for education and income. The findings of this study provide insights into the factors of perceived FWB of low-income young adults in Peninsular and East Malaysia. Policymakers, government and non-government organisations may utilise this study to develop new policies, financial programmes or campaigns to enhance the FWB of low-income young adults in Malaysia.
PurposeThe first objective of this study is to analyze whether financial behavior (FB), financial stress (FS), financial literacy (FINLIT) and the locus of control (LOC) influence subjective financial well-being (SFWB) among low-income households in Malaysia. The second objective is to investigate whether the use of digital financial services (DFS) moderates the influence of FB and FS, on SFWB.Design/methodology/approachMotivated by the literature on transformative service research (TRS), this study examines how the use of DFS impact SFWB among low-income households in Malaysia. Low-income households are chosen as they are more likely to be financially excluded and lack financial knowledge and skills. Using an interviewer-administered survey, trained enumerators collected data from 1,948 low-income households in Malaysia, selected using a two-stage sampling based on the National Household Sampling Frame obtained from the Department of Statistics Malaysia.FindingsResults reveal that SFWB is positively influenced by FB and the LOC, and is negatively impacted by FS and FINLIT. The evidence shows that the use of DFS counterintuitively weakened the strength of the relationship between FB and SFWB, but effectively reduced the adverse effect of FS on SFWB.Practical implicationsTo reverse the signs of relationship, financial services marketers need to identify the specific types of DFS that low-income households use in order to provide targeted marketing efforts and financial education to promote the use of DFS on a more holistic basis to increase financial well-being.Originality/valueThe findings of this study add to the body of knowledge deliberating on the opposing effects of technology on consumers' welfare and well-being. This study focuses on the lower-income stratum of Malaysian households as this group of the population is more likely to be financially excluded and have deficiencies in financial knowledge and skills. Findings of this study show that DFS use can actually diminish the positive impact of FB on SFWB while reducing the adverse effect of FS on SFWB.
This study unravelled the economic impacts of the coronavirus disease 2019 (COVID-19) on low-income households. The asymmetric economic impacts of the pandemic that are biased towards the poor, young, and women have been well established. However, micro evidence on the poor is limited, thus demanding detailed understanding to design an effective targeted assistance. In this study, data were gathered from face-to-face interviews using a sampling frame provided by the Department of Statistics Malaysia (DOSM). Online data collection was dismissed to ensure all low-income households had the same chance to participate, as some might have no online access. Logistic regressions were estimated to identify the characteristics of households that suffered job loss and income reduction. The findings revealed that one in ten households experienced job loss during the pandemic, while one third survived with lower income. The extent of income reduction was rather severe, as the pandemic had reduced income generation by more than half among the affected households. The regression outcomes showed that the higher-income households among the low-income households had higher chances of experiencing income reduction. A similar scenario was noted for less-educated households. Notably, the adverse impacts were not biased toward female-headed households, as is widely perceived. There was no evidence that economic sectors explained job losses, but households involved in the agriculture, domestic, and transportation sectors had higher chances of suffering from income reduction. These results suggest that monetary government assistance should not rely on general indicators, such as female-headed households and below-poverty-line income (PLI). Instead, a more effective measure is to look at other characteristics, such as employment type, education level, and job sectors.
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