Household Size Economies: Malaysian Evidence

People live in households with different size and composition and they consume a variety of goods; categorised as private and public goods. With the existence of public goods in the household, doubling the household size need not increase the consumption expenditure twofold to maintain the same standard of living. Using households’ per capita expenditure from the Household Expenditure Survey 2004-2005, we estimate the household size economies indices for household consumption goods through the Seemingly Unrelated Regression. The results suggested that the lower income households enjoy savings from a wider range of public goods compared to the higher income households.