DETERMINANTS OF MALAYSIA HOUSEHOLD DEBT: MACROECONOMIC PERSPECTIVE

DETERMINANTS OF MALAYSIA HOUSEHOLD DEBT: MACROECONOMIC PERSPECTIVE Nhda B Niza (PhD Candidae) Gadae School Bine Unieii Kebangaan Malayia 43600, Bangi Selango, Malayia Email: nhda.niza@gmail.com, Tel: 012-3545754 ABSTRACT Malayia hoehold deb o Go Domeic Podc (GDP) ha inceaed o 86.6% a he end of 2013 comaed o he eio yea a 75.8% in 2010. Thi cen dy emloy an aoegeie diibed lag model (ARDL) in examining he deeminan of Malayia hoehold deb hogh claifying a conme deb and mogage deb. Thi dy i ing aely daa oe he eiod 1996:4 o 2013:4 fo he ix aiable ch a Go Domeic Podc (GDP), Conme Pice Index (CPI), Hoing Pice Index (HPI), inee ae, conmion and eonal dioable income in modelling he deeminan of hoehold deb. The el how ha GDP wa ignificanly conibing o he highe conme deb and mogage deb. Thi finding indicae ha, he highe GDP, in which efleced a oiie economic gowh and diecly in he highe eaning become a oen heoy fo he wo aie in aking and iing moe deb. Keywod: Hoehold deb; Seced Deb, Uneced Deb, ARDL 97

INTRODUCTION Familie in Malayia hae exeienced a ignifican inceae in hoehold deb. Vaio meae wee aken o oecome hi oblem. Thee inclde ighening of lending gideline and olicy eiion ch a naowing loan ene fo eonal financing and oey chae. Malayian hoehold deb o Go Domeic Podc (GDP) ha inceaed o 86.6% by he end of 2013 (Cenal Bank of Malayia 2013), which i a banial inceae fom 60.4% of GDP in 2008. In comaion wih ohe Aian conie, hoehold deb i a follow: Soh Koea 86%, Thailand 84%, Taiwan 82%, Singaoe 72%, Hong Kong 62%, Philiine 35%, China 25%, Indoneia 16% and India 15% (Wold Bank 2014). Thi indicae ha he Malayian hoehold deb o GDP i one of he highe in Aia deeloing economie. The Deb Seice Raio of hoehold i 43.9%, which mean on aeage hoehold e moe han wo fifh of hei monhly dioable income o eice hei deb. Eecially woiome i hoehold deb among ciil ean, whee he deb eice aio i 60%, wice he acceable deb eice aio of 30%. Thi mean ha mo ciil ean ae ing moe han half of hei alay o ay off hei deb. Moeoe, aiic fom he Inolency Deamen eoed 1086 ciil ean who wee declaed bank in 2009 and had hei alay dedced fo inallmen aymen (The Sn, 3 Mach 2011). Some of he hoehold wihdaw hei Emloyee Poiden Fnd (EPF) o mooh hei conmion and hee i a gowing concen egading he amon of aing aailable afe eiemen. Alaming aiic ch a hi i he ime fo hi dy. The deelomen of hoehold deb i good fo oing economic gowh Palley (1994); Cecchei, Mohany, & Zamolli (2011), and imoing ocial welfae by moohing conmion in eone o change in hoehold income. Howee, o a ceain exen, he inceae in hoehold deb can be a hea o he economic yem if he deb eache a an nainable leel. Mian (2009) oide emiical o ha hoehold deb i he be edico of financial cii and economic eceion. Indeed, he imlicaion of coninoly inceaing hoehold deb i a edcion in aing and inemen (Hll, 2003), iae conmion, and declining demand in he hoing make (Debelle 2004). Thi i becae hoehold will be aying fo hei oanding loan and heefoe he economic gowh migh be eaded. The high leel of hoehold deb ceae lneabiliie no only o he economy, b alo i gie a negaie imac on financial abiliy (Chae & Flachel 2013). Exceie deb can el in defal of aymen o bankcy when he deb become nayable. Thee i alo he ik of being cagh in a cedi bbble, imila o he b-ime cii in he U.S in 2008, which eled in nmeo foecloe and he collae of eeal majo financial iniion (i.e. Lehman Bohe and Meill Lynch). Accoding o a Malayia Deamen of Inolency (MDI) eo, 60 Malayian declae bankcy eey day, mo of hem being yong adl beween he age of 18 and 35 (Cedi Conelling and Deb Managemen Agency, o AKPK). Thi how ha yong adl ae ggling o ay cedi cad deb in ode o mee hei financial need. The eaon fo hoehold aking on deb i o mooh hei conmion and a deendence on fe income (Life cycle Theoy), he behaio and aide of he indiidal himelf (i.e. liing beyond hei mean) (Ahmed, Imail, Sohail, Tabh, & Alia 2010), co of boowing i lowe de o financial deeglaion (Hll, 2003), eay o ge cedi faciliie which encoage ending on cedi (AEON cedi, Co Mamoh, ec.), co of liing and hoing ice inceae, and conined economic gowh a a ong ace ha all made hoehold moe comfoable in aking on deb. Pecaionay meae need o be aken in ode o aoid ik ch a ae ice hock, nemloymen hock, and hock fom income (Meniago, Mkddem-Peeen, Peeen, & Mongale, 2013). Financial die o een a hoing bbble in Malayia cold occ if hoehold deb canno be eoled fom an ealy age. Uing a macoeconomic eecie hogh claifying ino eced deb (i.e. mogage deb) and neced deb (i.e. conme deb), hi dy will exend he knowledge fom eio die o examine he inflencing faco ha affec he iing Malayian hoehold deb. The aionale fo hi wa ha he effec of a aiey of diffeen aoache i eied o ae he iaion in each of he diffeen leel. Thee wee nmeo inenaional die and eeache ha docmen he deeminan of hoehold deb a he maco leel (Kim, Lee, Son, & Son 2014; Meng, Hoang, & Siiwadana 2013; Meniago e al. 2013; Ganga 2010), b only a few ecifically addeed he Malayian exeience. The cen dy i ignificance becae cenly Malayia i haing an ie wih he iing hoehold deb o GDP aio. Moeoe, hee wa a dy done by he Wold Bank ha idenified he aio of hoehold deb o dioable income in Malayia a 140 ecen, one of he highe in he wold and aboe ha of he U.S. a 123 ecen and Thailand a 52 ecen. 98

The cen dy conibe o he exiing lieae on hoehold deb in eeal way. Fi, ince Malayia ha a diffeen eglaoy yem, which eeal ha finding in ohe conex migh no be alicable. In ohe wod, he finding in ohe conie may be le elean and alicable de o diffeence in he eglaoy ce in Malayia. Secondly, hi dy oide ggeion fo olicymake in ode o mainain he hoehold deb a a oleable leel ha aoid any damaging effec, aiclaly in deeloing conie. Moeoe, he a die do no ake an accon of financial cii on he model. Thi dy i ced wih he following ecion. The fi ecion i an inodcion. The econd ecion eiew a die on deeminan of hoehold indebedne. Nex i a ecion ha eeen he economic ecificaion. Secion 4 dice he finding fom he emiical model. Finally, Secion 5 mmaie and conclde hi ae. COMPOSITION OF HOUSEHOLD DEBT In he Malayian conex, he definiion of hoehold deb efe o he m of loan fo oeie, loan fo eonal e, loan fo eciie, moo ehicle loan, cedi cad among ohe (Cenal Bank of Malayia 2013). Hoehold deb can be caegoized ino wo ye. The fi ye i called eced deb ch a mogage deb. I i oeced by he financial iniion becae if hee i defal aymen, he mogage can be a collaeal. In em of cedi ik, mogage deb ha lowe ik comaed o conme deb b he ecenage of defal aymen i highe. The econd ye i neced deb and efe o conme deb ha coni of cedi cad, eonal loan, and ao loan. Conme deb nomally ae ed o finance he conmion of good and eice. Fige 1: Comoiion of Hoehold Deb (Soce: Cenal Bank, Malayia 2013). eidenial and non-eidenial oeie. *Poeie: Inclde Refeing o Fige 2.1 indicae ha he majo oion of hoehold deb i oeie loan followed by moo ehicle loan, eonal loan, eciie chae and cedi cad. Toal loan fo oeie kee inceaing de o iing hoe ice, eecially in Kala Lm, Selango, Penang and Joho Bah (NAPIC eo 2013). Moeoe, he goenmen offe a new cheme My Fi Home, which aaced moe boowe, eecially yong adl. Iniiaie aken by financial iniion alo encoage boowing by offeing low down aymen oion o a min negaie inee ae. A ecen dy done by Khazanah Reeach Inie (KRI) eoed Malayian affodable co of hoing i moe han 3x annal median income. Thi mean Malayian hoe ae moe exenie han hoe in Ieland and Singaoe. Cenly hoehold loan eem no o be a oblem e e, b i migh become an ie when a boowe financial obligaion exceed hei financial mean and el in finally defaling on hei financial 99

obligaion. The inceae in boowing a deiced in Fige 2 cold be an indicaion of he oenial of defal on a financial obligaion. LITERATURE REVIEW The emiical ineigaion egading he deeminan of hoehold deb i limied and hi migh be de o an infficien amon of aailable daa (End & Ha 1997; Hll 2003). Mico-leel infomaion ch a hoehold income, exendie and wealh i eenial o deec any lneabiliy caed by aid gowh of hoehold deb. The focal oin of hi dy i o examine he deeminan of hoehold deb. Theefoe, he dicion of he elaed lieae will foc on he main faco ha inflence he leel of hoehold deb in deeloed, deeloing and finally he Malayian cony. HOUSEHOLD DEBT IN DEVELOPED COUNTRIES The iing hoehold deb in deeloed conie and i economic and ocial imac ha aaced he aenion of economic analy, academician and olicy make. Accoding o Debelle (2004), he ie in hoehold deb in deeloed conie ha exceeded income. Reeach done by he inance comany Allianz (2013), indicae ha he Unied Kingdom (UK) ha he foh highe hoehold deb in he wold. Among die on he deeminan of hoehold deb in UK ae (Dinh, Mllinex, & Mi, 2012; Gahegood, 2012; Tdela & Yong, 2005). Uing a Veco ao-egeion model (VAR), Dinh e al. ( 2012) examine he effec of macoeconomic faco on aiable ch a wie-off of eced loan, hoe ice, inee ae, dioable income e head, and nemloymen. They conclded ha he macoeconomic faco ha inflence loan loe deend on he ye of aea and ha he imac of macoeconomic faco on mogage aea i moe ononced han neced loan. Tdela and Yong (2005) ed a diffeen aoach, he oelaing geneaion (OLG) model, o exlain he ie in boowing. Thi dy ado a imila aoach wih Bane and Yong (2003) b in diffeen conie. Bane and Yong condc he dy in Unied Sae (US) while Tdela and Yong in he UK. Thee finding fond ha he aid gowh of hoehold deb cold be exlained by inee ae, hoe ice, efeence, demogahic and eiemen income, and income gowh execaion. Kim e al. (2014) ineigaed he oenial cae of Koean hoehold deb which ha gown haly in ecen yea. Thei model incooaed GDP, lending ae, inflaion, leeage aio, gowh in deoi, NPL, call ae, ock ice and hoing ice a he exlanaoy aiable. The finding how he faco conibing o an inceae of hoehold deb i imila o adanced conie in em of ae ice hike, financial deeglaion, demogahic change and a elaiely ob macoeconomic enionmen. A dy in Eoean Union (EU) membe ae done by Bei, Domahkin, Roi, & Yin (2007) meae and chaaceie he exen of conme oe-indebedne. The dy ed a bjecie aoach o ealae conme indebedne and hen oide alable infomaion o financial eglaoy bodie. The dy by Mian, Rao, and Sfi (2011) and Mian and Sfi (2012), baed on US cony leel daa, exlained he effec of cmlaie hoehold deb o emloymen and conmion ding ime of financial moil. The agmen of maginal cmlaie hoehold deb in he yea 2002 o 2006 blended wih he lm in hoing ice a he beginning of he cii. Thi aied in ndeanding he one, eeiy, and he lengh of he been collae in conmion. Simila ie in Aalian hoehold deb wee fond by Caa & Simon (2003) in hei dy of faco affecing he financial conain on Aalian hoehold. Meng e al. (2013) analyed he deeminan of hoehold deb ing Veco Aoegeion (CVAR). The el ggeed hoing ice, GDP and he olaion hae a oiie effec on hoehold boowing. The negaie faco ha inflence he ie in hoehold deb ae inee ae, he nemloymen ae, and he nmbe of new dwelling. Jacoben (2004) emloyed a flexible dynamic model and he Nowegian aely daa fom 1994 Q1 o 2004 Q1 o eimae he effec of aio faco on hoehold deb. Seeal faco wee idenified o effec hoehold deb: hoing ock, inee ae, he nmbe of hoe ale, wage income, hoing ice and nemloymen ae. Fo hoehold deb in Sain, Nieo (2007) conideed exlanaoy faco of change in hoehold cedi. HOUSEHOLD DEBT IN DEVELOPING COUNTRIES Thee ae alo die condced on he deeminan of hoehold deb in deeloing conie. Mooe, Thoma, Adam, Cene, & Bank (2010) eoed ha hoehold deb in deeloing conie i iing fa. Seeal die aem o deemine he inceae of hoehold deb in Soh Afica ch a Aon and 100

Mellbae (2000), Kozè and Smi (2008), Meniago e al. (2013). Uing aely daa fom 1985:1 o 2012:1, Meniago e al. (2013) emloyed he VECM model o eimae he ominen faco ha lead o inceaing leel of hoehold deb. They fond ha ignifican gowh of hoehold deb cold be exlained by hoing ice, inflaion (CPI), GDP, hoehold conmion exendie and hoehold aing. Thaichaoen, Aiyachya, & Chched (2004) fom Thailand ineigaed he cae and ik of hoehold deb. The dy claimed ha low inee ae, demogahic, and declining boowing conain, conibed o deb in Thai hoehold. They ggeed ha cen deb leel in Thailand did no oe a hea o financial abiliy and he maco-economy. Abid & Zoai-ghobel (2012) eek o ineigae deeminan of hoehold deb in Tniia ing a obi model. They ed a obi model becae i idenifie he faco of hoehold indebedne by diingihing he wo go of hoehold. The go ae eaaed accoding o he nmbe of cedi eihe hoehold obained: one cedi, wo o moe cedi. HOUSEHOLD DEBT IN MALAYSIA Thi dy i no he fi o emhaize he deeminan of hoehold deb in Malayia. Fo examle Mokha & Imail (2013) analyed he end of Malayia Indebedne fom Q1:1997 nil Q4:2011 ing he Veco eo coecion Model (VECM). Thi wok foce on an Ilamic finance eecie and hey fond ha GDP, inflaion and lending ae ae leading aiable. Mokha ae migh hae benn moe conincing if he aho had conideed daa fom Ilamic financial Iniion olely ahe han ing daa fom boh Ilamic and Conenional financial iniion. Soedly he eeach make comaion beween he Ilamic and Conenional daa. Anohe dy dice he ie of hoehold deb baed on an Ilamic economic eecie (Zakaia e al. 2012). The dy highligh deb and finance incile accoding o Ilam fo boh hoehold and financial iniion. In he cen dy, he daa of hoehold deb will coe boh fom Ilamic and Conenional Financial Iniion. End & Ha (2009) exlained he end of hoehold deb in Malayia, faco conibed, comoiion of hoehold deb, imlicaion o moneay olicy and financial abiliy. The daa wee accmlaed fom 2000 o 2007 o decibe he cenaio of hoehold deb in Malayia. Howee all he exlanaion on hei ae ae no ooed in emiical analyi. Anohe dy on Malayia i Abdl Ghani (2010) emloyed he Odinay Lea Sae (OLS) mehod ing aely daa fom 2001 o 2009 o examine he deeminan of hoehold indebedne in Malayia. Thi dy concen he ignificance beween deb and Non-efoming loan (NPL). Baed on he finding, hee i a oiie elaionhi beween NPL wih hoehold indebedne. LITERATURE GAPS Een hogh hee ae die done in deeminan of hoehold deb in Malayia, he cae of inceaing deb leel in he hoehold eco fom he macoeconomic eecie i ill limied. The conclion of he aboe menioned dicion i a follow: i. No eeache ha eioly aemed o ae he hoehold deb eaaely fom conme deb and mogage deb. ii. No eeache ha eioly aken ino accon he ole of financial cii. Theefoe hi dy imoing he a die by conideing hi wo faco. RESEARCH METHODOLOGY Daa deciion Thi ae emloy he Aoegeie Diibed Lag aoach (ARDL) becae he aiable ae inegaed of ode (1) and (0). Eiew 8 and Micofi 5 ofwae wee ed o e he elaionhi beween hoehold deb and macoeconomic aiable ch a GDP, Conme Pice Index (CPI), Hoe Pice Index (HPI), Inee ae (R), Conmion (Con) and Peonal Dioable Income (PDI). Thee aiable wee eleced baed on he Life Cycle Hyohei Famewok deeloed by Ando and Modigliani (1963) and fom eio lieae ha fond he aiable o be ignifican deeminan of hoehold deb. Accoding o life cycle and emanen income heoy, hoehold efe aking on deb o mooh hei conmion baed on he execed inceae in fe emanen income. The conmion deend on income gowh: age, aing, inee ae and inflaion. Thee i a ciicim of hi heoy becae i doe no conide liidiy a conained aiable. 101

Since he ecod on hoehold deb i only aailable fo 1995 onwad, he daa of he cen dy coe a eiod beween Q4 1995 o Q4 2013. The oce fo hee daae ae he Cenal Bank Malayia (BNM), he Naional Poey Infomaion Cene (NAPIC) and Deamen of Saiic. In hi ae, hoehold deb ae caegoized ino wo ye: Seced Deb and Uneced Deb. Seced Deb (MD) i meaed by loan oeie which inclde eidenial and non-eidenial oeie. Uneced Deb (CD) ae meaed by he oal m of moo ehicle, eonal loan, cedi cad, loan fo eciie and ohe loan. Table 1: Deciion and Soce of Vaiable Vaiable Daa Deciion Soce Uni Abb Seced Deb Loan fo oeie BNM, Monhly Saiical Bllein Uneced Moo ehicle Loan, Loan fo BNM, Monhly Saiical Deb eonal e, Cedi cad, Loan fo Bllein eciie RM million RM million Real GDP GDP a conan 2005 make ice BNM Annal Reo Bil GDP MYR CPI Conme ice index 2005=100 BNM Annal Reo x CPI HPI Hoe Pice Index 2000=100 NAPIC x HPI MD CD Inee ae Lending inee ae BNM, Monhly Saiical Bllein Piae Piae conmion exendie a BNM Annal Reo Conmion conan 2005 make ice. Noe: Abb i a imlificaion of abbeiaion % R Bil MYR CONS Economeic Modelling To examine boh he long n elaionhi and dynamic ineacion fo he eaion, hi dy emloy an Aoegeie Diibed Lag (ARDL) ocede. The adanage of hi echnie i ha he e of aionay i alicable o he mixe of I (0) and I (1) daa (Peaan, Shin and Smih 2001). The ARDL aoach conain hee e in eimaing he model. The fi e i o eimae a andad log-log ecificaion of he coinegaing long-n elaionhi. The ARDL model fo Mogage Deb and Conme Deb can be wien a follow: ΔLMD = α 0 + β 1 LMD 1 + β 2 LGDP 1 + β 3 LCPI 1 + β 4 LHPI 1 + β 5 LR 1 + β 6 LCONS 1 + β 7 LPDI 1 + δ 1 LMD i + δ 2 LGDP i + δ 3 LCPI i + δ 4 LHPI i + δ 5 LR i + δ 6 LCONS i + δ 7 LPDI i + D + ε ΔLCD = α 0 + β 1 β 1 LCD 1 + β 2 LGDP 1 + β 3 LCPI 1 + β 4 LHPI 1 + β 5 LR 1 + β 6 LCONS 1 (1) + β 7 LPDI 1 + δ 1 LCD i + δ 2 LGDP i + δ 3 LCPI i + δ 4 LHPI i + δ 5 LR i + δ 6 LCONS i + δ 7 LPDI i + D + ε (2) Whee Δ i a fi diffeen oeao, while (,,,,,,) i oimm lag and ε efe o he eo em. D i a dmmy aiable, eeening Aian Financial Cii on yea and he Global Financial Cii. Whee D = 1 (he financial cii occ) fo eiod 1997:2 1998:4, 2007:1-2008:4 and D = 0 (no financial cii). To examine he long n elaionhi beween he aiable, heefoe, hyohee nll and alenaie m be 102

condced ing F-aiic. The join hyohee o be eed ae: H 0 = β 1 = β 2 = β 3 = β 4 = β 5 = β 6 (No long n elaionhi), H 1 β 1 β 2 β 3 β 4 β 5 β 6 β 7 (a long-n elaionhi exi). F- Saiic el need o be comaed wih he ciical ale ablaed by Naayan (2005). The amle ize of hi dy i 69, which i le han 100, and heefoe Naayan ciical ale wee choen. If he F aiic i geae han he e bond ale, hi indicae ha hee i a long n elaionhi. Coneely, if he comed F aiic i malle han he lowe bond ale, i mean ha no long n elaionhi exi and ha he nll hyohei canno be ejeced. Howee, if he F-aiic fall wihin he lowe and e bond, one may conclde he el i inconclie. Fo he econd e, i o e he exience of a long n elaion beween he aiable. The eaion of he LMD and LCD, can be eimaed a below: LMD = α 0 + β 1 LMD i + β 2 LGDP i + β 3 LCPI i + β 4 LHPI i + β 5 LR i + β 7 LCONS i + β 8 LPDI i + D + ε i 0 (3) LCD = α 0 + β 1 LCD i + β 2 LGDP i + β 3 LCPI i + β 4 LHPI i + β 5 LR i + β 7 LCONS i + β 8 LPDI i i 0 + D + ε (4) The lag ode of he aiable ae choen eihe Akaike Infomaion Cieia (AIC) o Schwaz Bayeian Cieia (SBC). In hi dy, he elecion of oimm lag i SBC. The mo imoan hing abo elecing aoiae lag ode i o aceain he e dynamic of he model. The final e i o eimae an eo coecion model aociaed wih he long n eimae, whee φ i he ho-n dynamic coefficien of he conegence of he model o eilibim and ECM i he eed of adjmen. Thi i ecified a follow: ΔLMD = φ 0 + υ 1 ECM 1 + φ 1 LMD i + φ 2 LGDP i + φ 3 LCPI i + φ 4 LHPI i + φ 5 LR i + φ 7 LCONS i + φ 8 LPDI i + ε i 0 (5) ΔLCD = φ 0 + υ 1 ECM 1 + φ 1 LCD i + φ 2 LGDP i + φ 3 LCPI i + φ 4 LHPI i EMPIRICAL RESULTS + φ 5 LR i + φ 7 LCONS i + φ 8 LPDI i i 0 + ε (6) Befoe oceeding o long n and ho n elaionhi, one m make e ha none of he aiable ae I (2) becae hi will inalidae he mehodology. To ineigae he eence of ni oo in a ime eie, hi dy eleced he andad Agmened Dickey-Flle (ADF) and Phili Peon (PP) e. Thee wo e wee condced o deemine he ode of inegaion of he aiable. Fom 1996:4 o 2013:4, he emiical el indicae ha he mogage deb and conme deb i inegaed of ode I(1), a well a indeenden aiable exce fo GDP, HPI and Piae Conmion, which i inegaed of ode I(0). The el i hown in Table 2. 103

TABLE 2 Uni Roo Te Vaiable ADF PP I(0) I(1) I(0) I(1) Mogage -3.093713-7.241907*** -3.094315-7.241907*** Deb Conme -2.028680-9.172783*** -1.990911-9.214017*** Deb GDP -3.896810** -5.384143*** -4.111785** -12.98075*** CPI -2.949546-6.263084*** -2.549299-5.909008*** HPI -7.774449*** -9.558000*** -7.774449*** -61.36658*** R -2.779730-5.262999*** -2.086579-4.877000*** CONS -6.776763*** -6.419669*** -5.995446*** -9.092399*** PDI -2.793918-3.655326** -1.399605-3.785394** Noe: *Significan a 10%, ** Significan a 5%, Significan a 1%. All he aiable ae eimaed in log fom exce fo he Inee Rae (R). Afe confiming none of he aiable ae I (2), he nex e wa o oceed wih he hee e of he ARDL aoach. To efom he ARDL bond e, a condiional Eo Coecion Model (ECM) i eimaed wih wo and fo lag fo each model. Two and fo lag wee choen becae he daa i on a aely bai. TABLE 3 Coinegaion Te fo he Exience of a Long-Rn Relaionhi Model F-aiic Model 1: MD = ƒ (GDP, CPI, HPI, R, CONS, PDI) 5.8181 Model 2: CD = ƒ (GDP, CPI, HPI, R, CONS, PDI) 5.1394 k=7, n=69 Naayan (2005) Ciical Vale Lowe Bond Ue Bond 1% 3.774 5.248 5% 2.913 4.168 10% 2.519 3.669 Table 3 oide he el of he F-aiic o jify he exience of he coinegaion o long n elaionhi among he aiable. Model 1 how ha he nll hyohei i ejeced a he 1 ecen ignificance leel. The comed F-aiic of 5.8181 i aboe he e bond ale of 5.248 a he 1 ecen ignificance leel. While fo Model 2 ha i conme deb, he F-aiic i 5.1394 and fall beween he bond ale a he 1 ecen leel ggeing coinegaion i een. In m, hee indicae ha hee exi a long-n coinegaion elaionhi among he hoehold deb and he macoeconomic aiable (GDP, Conme Pice Index, Hoe Pice Index, Inee ae, Conmion and Peonal Dioable Income). Nex e i o eimae he eaion (3) and (4). The el of long n elaionhi i eoed in able 4. TABLE 4 Eimaion of Long Rn Coefficien Model 1 Model 2 (Deenden Vaiable = LCD) (Deenden Vaiable= LMD) Regeo Coefficien Pobabiliy Coefficien Pobabiliy LGDP 1.5757.121 1.8855*.064 LCPI -1.3071.196.73072.468 LHPI -1.9306*.059-1.4017.166 R -.64597.521 3.53961**.001 LCONS -.31959.751 1.7701*.082 LPDI 2.3331**.023 -.17983.858 D -.84031**.404-1.3409.185 104

Noe: ARDL fo model 1 (1,0,0,0,0,0,0,0) and fo model 2 (1,0,0,0,0,0,0,0) lag fo each aiable i eleced baed SBC. ***, **, * i he ignificance leel a 1%, 5% and 10% eeciely. Fo Model 1 of Table 4, wo aiable, namely GDP and Peonal Dioable Income, ae oiiely affeced by Mogage Deb. Thi indicae ha in he long n, GDP and Peonal Dioable Income wold affec Mogage Deb. HPI and Peonal Dioable Income ae aiically ignifican a he 1 and 5 ecen ignificance leel in inflencing Mogage Deb. Meanwhile, fo Model 2 of Table 4, GDP, CPI, inee ae and conmion i fond o oiiely affec Conme Deb. Only GDP, Conmion and Inee ae ae aiically ignifican a 1, inee ae a 5 ecen leel inflencing Conme Deb. Regading he dmmy aiable fo Model 1, he eimaion el fo boh model indicae ha i ha no imac and i no ignifican. TABLE 5 Eimaion of Sho Rn (VECM) Model Model 1 (DV= LMD) Model 2 (DV = LCD) Regeo Coefficien Pobabiliy Coefficien Pobabiliy ECM -3.35161**.001 -.41008***.000 ΔLGDP 1.5909.117 1.9831*.052 ΔLCPI -1.4339.157.70909.481 ΔLHPI -1.9579*.055-1.3688.176 ΔR -.60701.546 2.4377**.018 ΔLCONS -.32237.748 1.6827*.098 ΔLPDI 2.2090**.031-1.181651.857 D -.86052.393-1.84621.184 R-Sae Dbin Waon F-Saiic Pob (F-aiic).23541 2.1154 (8, 57) 2.1937.041.34010 2.3705 (8, 57) 3.6721.002 Noe: ARDL (1,0,0,0,0,0.0,0) lag fo each aiable i eleced baed on SBC. The deenden aiable i ΔLMD. ***, **, * i he ignificance leel a 1%, 5% and 10% eeciely. Table 5 indicae he eimaion el of he ho n model ing ARDL (1,0,0,0,0,0,0,0). A hown in Model 1, GDP and Peonal Dioable Income ae oiie in effec on Mogage Deb. HPI and Peonal Dioable Income ae ignifican a he 1 and 5 ecen leel inflencing Mogage Deb. In ohe wod, an inceae in hoing ice and eonal dioable income will fhe inceae he deb. While fo he Model 2, GDP, CPI, Inee ae and conmion ae oiie inflencing Conme Deb. The ECM aiable which exlain he eed of he adjmen i alo ignifican a 1 ecen ignificance leel fo boh Model. Thi indicae ha hee i long n caaliy in Mogage Deb and Conme Deb. Fo he diagnoic check, he F-aiic fo boh model i ignifican. Thi mean he indeenden aiable joinly can inflence deenden aiable. CONCLUSION Alhogh he deeminan of hoehold deb wee examined exeniely in he eio die, o my knowledge no dy h fa ha emiically eed mogage and conme deb eaaely. Theefoe he objecie of hi dy i o ineigae he elaionhi beween macoeconomic aiable and Mogage Deb and Conme Deb eaaely. The eleced macoeconomic aiable ae GDP, HPI, CPI, Inee Rae, Conmion and Peonal Dioable Income. To conclde, GDP i aociaed wih an inceae in Conme Deb and Mogage Deb eihe in he long n o ho n elaionhi. The highe GDP, which i efleced fom oiie economic gowh and diecly in he highe eaning become a oed heoy fo he wo aie in aking and iing moe deb. Baed on hee finding hi dy ooe ome ggeion ha can be done o miigae exceie hoehold deb. Fily, aciiie inoling eal eae eclaion hold be conolled. Since a hoing loan comie a majo oion of hoehold deb, i migh be ime fo olicymake o ay moe aenion o he 105

bank lending olicy fo hoehold. Riing hoing ice ae a co bden o he new home bye. The inceae in hoing ice i no in andem wih he inceae in aeage hoehold income. Fo hoe who wan o a new familie hee ae no affodable way o by hoe and chae migh deend on goenmen cheme ch a he My Fi Home Scheme o (Pemahan Rakya 1 Malayia) PR1MA. The exience of PR1MA o ai he lowe income go o hae hei own hoe i a good moe by he goenmen. The Goenmen effo aken o cb he exenie hoing ice i hogh ha moe. Howee, a leeway i gien o he boowe, ch a 110% financing inead of 90% financing aied a concen if he bye i financially ond o ake he loan. FUTURE DIRECTION OF RESEARCH Fe eeach hold conide analying daa on den deb ogehe wih anohe aiable. Edcaional loan, ch a Naional Highe Edcaion Fnd Cooaion (PTPTN), MARA loan o any eonal loan fo hem o fhe dy eihe in local (blic o iae iniion) o oeea. They need o eay hee loan afe finihing gadae chool and nowday, PTPTN i nde CCRIS. The analyi i imoan o dicoe he imac of den deb bden o he indiidal himelf, economy and alo o he ociey. REFERENCES Abdl Ghani,N. 2010. Hoehold indebedne and i imlicaion fo financial abiliy in Malayia. The Soh Ea Aian Cenal Bank (SEACEN), Kala Lm, P80, Chae 3. h://www.eacen.og/gi/df/blicaion/eeach_oj/2010/80/hoe3.df Abid, L., & Zoai-ghobel, S. (2012). Hoehold indebedne in Tniia, 3(10), 341 350. Ahmed, Z. U., Imail, I., Sohail, M. S., Tabh, I., & Alia, H. (2010). Malayian conme cedi cad age behaio. Aia Pacific Jonal of Makeing and Logiic, 22(4), 528 544. Ando, A., & Modigliani, F.(1963). The life cycle hyohei of aing: Aggegae imlicaion and e. Ameican Economic Reiew, 53(1), 55 84 Aon, J. & Mellbae, J. 2000. Financial libealiaion, conmion and deb in Soh Afica 1 47. Bank Negaa Malayia, Financial Sabiliy and Paymen Syem Reo, (2013) Bane, S and Yong, G (2003), The ie in US hoehold deb: aeing i cae and ainabiliy, Bank of England Woking Pae no. 206. Bei, G., Domahkin, N., Roi, M., & Yin, Y. P. (2007). Conme oe-indebedne in he EU: meaemen and chaaceiic. Jonal of Economic Sdie, 34(2), 136 156. Bianco, K. M. (2008). The Sbime Lending Cii : Cae and Effec of he Mogage Meldown. Caa, G. La, & Simon, J. (2003). A Tale Of Two Sey : Hoehold Deb And Financial Conain In Aalia. Cecchei, S. G., Mohany, M. S., & Zamolli, F. (2011). The eal effec of deb, 352(352), 25 27. Chae, M., & Flachel, P. (2013). Woke deb, defal and he dieiy of financial fagiliie. Scal Change and Economic Dynamic, 27, 48 65. Cedi Conelling and Deb Managemen Agency h://www.akk.og.my/haening/new/eeleae/id/1334/bankcie--32-in-1 Debelle, G. (2004). Hoehold Deb and he Macoeconomy. SSRN elibay, 51 64. Dinh, M. T. H., Mllinex, A. W., & Mi, P. (2012). Macoeconomic faco inflencing UK hoehold loan loe. Jonal of Financial Reglaion and Comliance, 20(4), 385 401. End, N., & Ha, T. G. (1997). Hoehold deb in Malayia, (46), 107 116. Ganga, G. (2010). Hoehold Cedi in Gyana. Gahegood, J. (2012). Self-conol, financial lieacy and conme oe-indebedne. Jonal of Economic Pychology, 33(3), 590 602. Hll, L. (2003). Financial deeglaion and hoehold indebedne. Jacoben, D. H. (2003). Wha inflence he gowh of hoehold deb?, 1. Jacoben, Dag Henning and Bjon E. Nag, (2004), Wha Inflence he Gowh of Hoehold Deb? Economic Bllein, Ocobe Kim, H. J., Lee, D., Son, J. C., & Son, M. K. (2014). Hoehold indebedne in Koea: I cae and ainabiliy. Jaan and he Wold Economy, 29, 59 76. Kim, Y. K. (2011). Macoeconomic Imlicaion of Hoehold Deb : An Emiical Analyi, (May). 106

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