KRI Household Report Shows Why Higher Income Does Not Translate Evenly Into Wellbeing

Malaysia's improving national income figures conceal wide differences in households' ability to secure decent work, manage food costs and access essential services, according to a new Khazanah Research Institute report that argues wellbeing must be assessed beyond the amount of money coming in.

Published Oct. 23, The State of Households 2026: From Income To Wellbeing is the sixth edition of KRI's flagship study. It examines income, spending, working life, education and health before considering how age, gender, location and structural dependencies shape daily living conditions.

One of its clearest geographic findings is that 111 of Malaysia's 166 districts had poverty rates above the national rate of 5.1% in 2024. Sixty-six had rates above 10.2%, more than twice that national benchmark. The comparison shows why an improving countrywide measure cannot describe the circumstances in every locality.

KRI also reports that households spent an average RM902.70 a month eating out in 2024, compared with RM875.80 on food at home. The difference is RM26.90, calculated from the institute's figures. It is a comparison of national spending averages, not evidence that every family spends more at restaurants than at grocery shops.

The underlying official expenditure data provide a broader view of household commitments. The Department of Statistics Malaysia's 2024 household expenditure survey puts mean monthly consumption spending at RM5,566, up from RM5,150 in 2022. Housing and utilities accounted for 23.5%, restaurants and accommodation 17%, food and beverages 15.7%, and transport 11%.

The categories are not interchangeable. Restaurants and accommodation includes more than food eaten away from home, while the food-and-beverages category is part of a separate classification. Comparing the 17% official grouping directly with KRI's narrower eating-out measure would obscure what each number actually counts.

The official composition shows that housing, restaurant and accommodation services, food and transport together absorb about two-thirds of average household consumption expenditure. These recurring commitments leave households with different room to adjust when one bill rises. The average itself does not reveal how those pressures differ across income groups or household sizes.

On the income side, DOSM records a median monthly household income of RM7,017 for 2024 and a mean of RM9,155. The survey describes households averaging 3.7 people and 1.8 income earners. A household income figure therefore cannot be treated as an individual salary, and the mean should not be substituted for the midpoint household's income.

DOSM's urban median was RM8,139, compared with RM4,588 in rural areas. Those values describe income differences before accounting for the detailed costs and services available in each place. Higher urban income alone cannot establish that a particular household has more money left after housing, transport and other necessities.

The poverty release makes another distinction relevant to the debate. Malaysia's absolute poverty rate was 5.1% in 2024, while its relative poverty rate was 16.7%. The relative line was defined using half of median gross household income, producing a threshold of RM3,509. The two measures answer different questions and should not be presented as competing estimates of the same threshold.

The Finance Ministry's Economic Outlook 2026 also treats eating away from home as a structural part of household consumption. Its analysis describes convenience and time-saving choices as influences on demand, with restaurant and accommodation expenditure gaining share across income groups over the longer period it examines.

That perspective changes the interpretation of a food budget. A larger bill for prepared meals can involve prices, the number of meals purchased and the time available for shopping and cooking. Expenditure data alone cannot isolate those influences. Nor can it show the nutritional composition of every meal bought outside the home.

For a family comparing its circumstances with national figures, the relevant unit is therefore more detailed than a single monthly total. The number of earners, dependants, journeys to work and access to nearby services can all affect how income supports daily life. KRI's framework identifies these intersecting conditions; it does not establish that one household's spending choice explains another household's financial pressure.

A district-focused response would need to identify the particular constraint rather than infer it from the national average. Where formal jobs are scarce, a discussion limited to shopping habits would miss the labour-market issue. Where services require travel, the cost of reaching them can matter alongside their nominal availability. These are implications of examining wellbeing across several dimensions, rather than a new estimate of how much any individual family should spend.

Taken together, the reports support a more specific discussion of living standards: which households are being measured, in which places, against which costs and access to services. KRI's contribution is to put those dimensions alongside income growth. The policy question is how national gains reach daily life in districts and households whose opportunities and unavoidable expenses differ.