Using asset index to reassess poverty in the Northern States of Malaysia: do the poor stay poor?

Abstract

PurposeCurrently, Malaysia uses the Poverty Line Income (PLI) to measure poverty. This is because income measurement is the easiest way to collect data, but in its simplicity, it fails to capture the broader meaning and implications of poverty. Asset index is one of the non-monetary poverty measurements which have been established by researchers but not used in measuring poverty in Malaysia. A household might be poor in income, but assets may prevent them from being trapped in poverty.Design/methodology/approachThis study will reassess the poverty of 302 households in the Northern States of Malaysia using the asset index and also the current state of poverty incidence with change under asset index.FindingsThe results show that households in the Northern States of Malaysia are interpreted as being ‘poorer’ when poverty is measured using assets as opposed to income alone. Besides that, poverty incidence of Malay households, households living in urban area and households with middle-aged heads have high poverty incidence, while households with a head of households that is single and highly educated have low poverty incidence. The logistic regression analysis shows that the determinants of poverty incidence based on the asset index are Indian, Penang and Perak State, the age of the head of household, distance to the education centre from home.Originality/valueThis study shows the asset index measurement which have not been done in Malaysia. This will contribute to the improvement of poverty measurement of the country.

Economic Growth, Income Inequality, Government Integrity, and Spending towards SDG 1 on Poverty Eradication: An Empirical Study from Twenty Muslim-Majority Countries

“…Poverty eradication is a major concern for developing and developed countries around the world, highlighted by its positioning as SDG 1 within the SDG framework. It is also the driving force for nations' economic and social development (Azhar & Mohd, 2020). Apergis, Dincer, & Payne (2011) note that a high level of poverty is not a problem faced only by developing countries, but that developed countries as well, such as the United States, are still facing serious challenges with poverty.…”