Impact of Oil Prices on Consumer Spending: Evidence from Malaysia

Abstract

The main aim of this study is to examine the impact of oil prices on consumer spending. This study highlights the theoretical underpinning of the literature that focuses on the impact of oil prices on consumer spending in the context of Johor Bahru, Malaysia. In this study, the semi-structured interview was used to collect data from the general consumers. The consumer selection was based on the convenience sampling and survey questionnaires were distributed to 35 respondents in Johor Bahru. In addition, the data was collected from 30 respondents for feedback, and used 25 responses on the basis of complete information for analysis. Further, this study used the thematic analysis. The findings highlighted that the change in oil price have high impact on the lower and middle-income group consumers. On the other hand, high-income group consumers have little impact on the consumer spending. Furthermore, results of the study have important implications for future practice. It provides policy direction and practical implications to the organizations, consumers, and researchers. Based on research, the main focuses should be on the improvement of living standards of the average consumers as the oil prices influence on consumer spending to highlight their spending behavior. The coronavirus pandemic worsened the consumer spending all over the world (World Data Bank, 2020). Therefore, for future research work, it would be interesting to do research on plunge in oil prices and consider the measures implemented by Malaysian governments as lockdown are expected to reduce the consumer spending of Malaysian economy in 2020.