Page 260 - Contributed Paper Session (CPS) - Volume 7

CPS2084 Siti Aisyah Mohd Padzil et al.

Model Averaging on Household Income to
Examine Poverty in Malaysia
Siti Aisyah Mohd Padzil, Khuneswari Gopal Pillay, Rohayu Mohd Salleh
Department of Science and Mathematics, Faculty of Applied Science and Technology,
Universiti Tun Hussein Onn Malaysia, Pagoh Kampus, KM 1 Panchor Road, 84000, Muar Johor
Malaysia
Abstract
Household income for Malaysian vary due to many factors as Malaysian are
multiracial and multi religious. Malaysia is divided into two regions which are
east and west Malaysia. Due to different geographical area, there’s a contrast
on the development between these two regions. Even though the rate of
poverty in Malaysia had been reduce yearly, the poverty of Malaysian still has
not been eradicated. This paper aims to examine the consequences of
households differences (age, gender, marital status, education, activity and
family size), states, region and net income to the cause of poverty among
Malaysian in year 2012 using data obtained from the Department of Statistic
Malaysia (DOSM). For statistical modelling, this paper will show a comparison
between Model Averaging (MA) as well as Alternative Model Averaging (AMA)
based on and . The performance of best model from each method
will be evaluated using accuracy such as RMSE, MSE and MAE). The analysis
indicates that computing weights based on produce a slightly better
performance model for both MA and AMA approach. Model formed using
AMA based on is picked as the best model of household income data as
it has minimum error among other model. In conclusion, the best model
summarizes that state, household differences as well as net income are the
causes of poverty among Malaysian. There’s a negative relationship between
household size with probability of not poor which means as household size
increases, risk of poverty increases.

Keywords
Household Income; AICc; BIC; Household

1. Introduction
Household poverty is defined by Poverty Line Income (PLI) which measures
the capacity of household with the minimum requirement for food and non-
food consumption (Saidatulakmal, 2014). Household with gross income under
the national PLI will be categorized as poor. PLI in Malaysia varies according
to region, urban or rural and it changes over the time. Pasthiban (2018)
classified the factors of poverty into two aspects which are
income/expenditure-based factors and secondly on non-income factors
(example: household characteristic, health, state, amenities and etc.). This

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