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This working paper refines and updates the Expenditure-Space model, first introduced in 2019, to provide a more robust framework for analyzing Malaysian household classifications. By leveraging updated data, it challenges the long-standing B40, M40, and T20 demarcations, revealing significant discrepancies with Malaysia’s actual economic stratification.
Our findings demonstrate greater consistency over a decade which show that the top 30% (T30) exhibit middle-class spending patterns, while the middle 50% (M50) remain economically vulnerable, experiencing trade-offs between essential and aspirational expenditures. The bottom 20% (B20) continue to focus on fulfilling basic needs, such as food, housing, and clothing.
This refined perspective highlights the need for more accurate classifications aligned with real consumption patterns. By enhancing the Expenditure-Space model, this paper provides policymakers and researchers with a new framework for addressing vulnerabilities and improving living standards.
