Inflation pressure and precautionary saving behaviour among Malaysian households
DOI:
https://doi.org/10.24191/jeeir.v14i2.10059Keywords:
Household saving behaviour, Perceived inflation pressure, Income adequacy, Perceived government policy effectiveness, Life-cycle hypothesisAbstract
Household saving behaviour plays an important role in strengthening household financial resilience, particularly in the context of rising living costs and economic uncertainty. This study examines the influence of perceived inflation pressure, perceived income adequacy, and perceived government policy effectiveness on household saving behaviour in Peninsular Malaysia. Grounded in the Life-Cycle Hypothesis (LCH), the study explores how perception-based economic factors shape saving decisions among households. Data were collected from 385 households using a structured questionnaire distributed through online platforms. The findings indicate that perceived inflation pressure has a significant positive effect on household saving behaviour, suggesting that households tend to increase precautionary savings when they perceive rising cost-of-living pressures. Perceived income adequacy also demonstrates a positive relationship with saving behaviour, indicating that individuals who perceive their income as sufficient are more likely to engage in consistent saving practices. Similarly, perceived government policy effectiveness contributes positively to household saving behaviour by strengthening confidence in financial support mechanisms. Overall, the results highlight the importance of perception-based economic factors in influencing saving decisions among households. The study contributes to the literature by providing behavioural insights into household financial decision-making in a developing economy context and offers policy implications for strengthening household financial resilience.
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