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This paper used a primary data collected through a surveys among farmers in rural Kedah to examine the effect of non farm income on poverty and income inequality. This paper employed two method, for the first objective which is to examine the impact of non farm income to poverty, we used poverty decomposition techniques-Foster, Greer and Thorbecke (FGT) as has been done by Adams (2004). For the second objective, which is to examine the impact of non farm income to income inequality, we used Gini decomposition techniques. Our result indicate that non farm income can improve the level of poverty or non farm income sources contributed towards poverty reduction among agricultural household. All of the poverty measures show that the inclusion of non-farm income into the agricultural household income reduce the level, depth and severity of poverty. But on the other hand, non farm income increased income inequality among agricultural household in Kedah. As expected agricultural income is the main source of income for rural people in the study area. The policy implication of this study is to encourage non-farm income activities among agricultural households as this would raise their income and hence, reduce poverty among them. However, it should be focused on value-added activities, especially on the lower income group.

The determinants technical efficiency among smallholder cocoa farmers has been well studied in agricultural literature. Among the factors identified are the demographic characteristics that affect farmers' decision-making process and the ability of farmers to execute the decision effectively. In Malaysia, cocoa production is characterized by several problems that lead to low productivity. First is the negligence of the agricultural sector by the past administration due to shift in policy favoring manufacturing sector that now accounts for the bulk of foreign exchange earnings. Second is the endemic problem in the cocoa industry. The low productivity has resulted in the continuous fall in percentage share of cocoa output since 2001. Therefore, increasing productivity would increase the percentage share of cocoa production. Accordingly, this study explores the determinants of technical efficiency among cocoa farmers in Malaysia. The study relies upon primary data gathered during the 2013 production season. Data are collected from a set of structured questionnaire administered on 375 smallholder cocoa farmers throughout Malaysia. Results of the analysis show that record keeping, level of knowledge and status of farmers (either part-time or full-time) affects efficiency. This finding suggests that policies that would directly affect these identified variables should be pursued.

ABSTRAKArtikel ini akan membincangkan kaedah atau metodologi baru bagi mengenalpasti isi rumah miskin berdasarkan realiti sebenar kemiskinan. Dalam konteks kemiskinan di Malaysia, kemiskinan dijelaskan melalui perspektif kewangan atau pendapatan. Melalui konsep ini kemiskinan terbahagi kepada dua iaitu kemiskinan mutlak dan kemiskinan relatif. Walaupun begitu, kemiskinan yang kerap dirujuk di Malaysia ialah kemiskinan mutlak kerana pendapatan isi rumah dibandingkan dengan Pendapatan Garis Kemiskinan (PGK). Pengukuran jenis ini iaitu menggunakan kaedah pendapatan dalam mengenalpasti individu atau isi rumah miskin disebut juga sebagai pengukuran unidimensi. Berbeza dengan pengukuran unidimensi, pengukuran kemiskinan menggunakan kaedah multidimensi belum lagi digunakan dan belum dijadikan asas kepada pembuat dasar untuk membasmi kemiskinan. Pengukuran kemiskinan multidimensi ini lebih kepada langkah-langkah mengenalpasti "siapa yang miskin" berdasarkan kekurangan yang dialami oleh isi rumah dalam setiap dimensi. Dengan pengukuran kemiskinan multidimensi ini, identiti atau ciri-ciri orang yang miskin wujud pada dua tahap atau peringkat. Tahap pertama ialah mengenalpasti kekurangan individu dalam setiap dimensi dan yang kedua melibatkan definisi kemiskinan menerusi semua dimensi. Kemiskinan multidimensi, merupakan satu kaedah pengukuran kemiskinan baru yang membolehkan kita melihat kekurangan sebenar ataupun realiti kemiskinan yang dialami oleh sesebuah isi rumah itu. Kata kunci: Kemiskinan; dimensi kekurangan; ukuran unidimensi; ukuran multidimensi. ABSTRACT This article will discuss the methods or methodologies to identify poor households based on the reality of poverty in Malaysia. In Malaysia the context of poverty is explained through a financial perspective or income. Through this concept, poverty is divided into two,absolute poverty and relative poverty. However, poverty in Malaysia is often referred to as absolute poverty income households compared with Poverty Line Income (PLI). This type of measurement, using the income method in identifying an individual or household poor also as a measurement of unidimension. In contrast to the unidimension measurement, measurement of poverty using the multidimensional poverty measure is no longer in use and not as a basic for policy makers to alleviate poverty. The measurement of multidimensional poverty is more on measures and identify "who is poor" based on the shortage experienced by households in each dimension. With this multidimensional poverty measurement, identity or characteristics of the poor exist on two levels or stages. The first stage is the identification of the individual in each dimension and the second involves the definition of poverty through all dimensions. Multidimensional poverty, is a new poverty measurement method that allows us to see a real shortage or reality of poverty experienced by a householder.

Colleting the data through a survey in the Northern region of Malaysia; Kedah, Perlis, Penang and Perak, this study investigates intergenerational social mobility in Malaysia. We measure and analysed the factors that influence social-economic mobility in Malaysia. In estimating the factors that influence social-economic mobility, we employ a binary choice model based on the maximum likelihood method. The social mobility variable is measured using the difference between the educational achievement between a father and his son. If there is a change of at least of two educational levels between a father and his son, then this study will assign the value one (1) which means that social mobility has occurred. We found that besides father's education, father's attitude and the establishment of a university in the area have also contributed to social mobility of the rural communities.

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Abstract:The main objective of this paper is to fi ll a critical gap in the literature by analyzing the effects of decentralization on the macroeconomic stability. A survey of the voluminous literature on decentralization suggests that the question of the links between decentralization and macroeconomic stability has been relatively scantily analyzed. Even though there is still a lot of room for analysis as far as the effects of decentralization on other aspects of the economy are concerned, we believe that it is in this area that a more thorough analyses are mostly called for. Through this paper, we will try to shed more light on the issue notably by looking at other dimension of macroeconomic stability than the ones usually employed in previous studies as well as by examining other factors that might accentuate or diminish the effects of decentralization on macroeconomic stability. Our results found that decentralization appears to lead to a decrease in infl ation rate. However, we do not fi nd any correlation between decentralization with the level of fi scal defi cit. Our results also show that the impact of decentralization on infl ation is conditional on the level of perceived corruption and political institutions.

Income inequality has long been a frustrating feature of Malaysian economic development. The country income inequality, represented by the Gini Coefficient has decreased only slightly to 0.41 in 2014 from 0.51 in 1970. This income inequality, however, was accompanied by rapid economic growth. Gross Domestic Product (GDP) has grown by an average of more than 7 percent per year for 25 years or more. The expectations that the high economic growth would accompany low income inequality as hypothesized by the inverted ‘U-shaped’ Kuznets curve have not come true for Malaysia. Why did it occur? Unlike many other conventional studies which look at the relationship between growth and income inequality to explain this phenomenon; this study intent to looks at the foreign direct investment (FDI) relationship with income inequality. Since 1990s, FDI has been an important source of economic growth for Malaysia, bringing in capital investment, technology and management knowledge needed for economic growth. FDI had increased almost thirty-fold during 1970s to 2000s. There is a heated debate on the effects of FDI on income distribution. While FDI may have been good for development this masks the facts that not all types of workers necessarily gain from FDI to some extent. FDI induced skill specific technological change where it can be associated with skill-specific wage bargaining or skill-intensive sectors. This study presents an attempt to evaluate the impact of foreign direct investment (FDI) on income distribution among labors. The Malaysia’s Social Accounting Matrix (SAM) is constructed as a framework for the analysis. In this SAM the detail framework of the component of FDI in various sectors, production sectors and labor groups are essential to analyse different effects from different component of FDI on the labor’s income distribution among different labor group. This structure of SAM would answer the question of either and which component of FDI will benefit the most to the low income. The study finds that the FDI expansion has impacted negatively on the distribution of income across different labor groups, where it has increased the high-low or skilled-unskilled income inequality. It also indicates that there are differences in the composition of the FDI that impacts income distribution among labor. The apparent differences in the magnitude of the effects of the different FDI components suggests that variations in the FDI allocations among sectors should be considered as a possible policy variable to achieve income equality goals.