There is a dichotomy in the way we address the cost of living issue. Take a look, for instance, on sugar consumption where the price of sugar is controlled through regulation.
On the one hand, sugar consumption is incentivised through subsidies. On the other hand, we are faced with the issue of overweight and obesity which ultimately contribute towards Malaysia’s number one public health enemy, the non-communicable diseases (NCDs).
Amidst increasing public healthcare expenditure, taxpayers money is also used to control sugar price. It is a double whammy as far as public finance is concerned, given the tight fiscal space the country is in.
While we complain about the increasing food prices, Malaysians waste a lot of food – more than half of Malaysians waste food daily.
According to a report by the UN Environment Programme (UNEP) in 2023, Malaysians wasted a staggering 8.3 million metric tonnes of food annually. Considerable portion of this waste is still edible. Food wasted by Malaysians is enough to feed millions of people.
Likewise, while we have a policy to eliminate single-use plastic by 2030, plastic use is widespread in the F&B industry. Malaysia is ranked eighth among the top 10 countries with the most mismanaged plastic waste in the world.
The above are just a few examples pointing towards the lifestyle issue related to the cost of living. While public policies are important to address the issue, fundamentally, we also have to address behavioural issues among Malaysians for policies to function effectively.
There has to be a change in our behaviours towards food consumption. Sustainable consumption is the way forward and moderation is key. Each member of society is responsible to strive towards achieving the right balance in consumption, be it at home or at work.
Embracing such values is not strange to our society, given that moderation is the pillar of many cultures. Islam promotes moderation and balance in the way of life while wastage is prohibited.
Thus, in addition to ongoing efforts to address the cost of living issue, the government must nudge Malaysians to adopt sustainable consumption and healthy lifestyle.
In this regard, behavioural economics can play a role in improving the effectiveness of government policies.
Ultimately, public policy is about changing human behaviour. The authorities can implement appropriately crafted behavioural interventions to address the cost of living and other issues facing society, in addition to conventional policy tools such regulation, price control, taxation and ban.
At the grassroot level, community members can play a proactive role in nudging their members towards prosocial behaviours by promoting social norms for moderation, sustainable consumption, healthy lifestyle and altruism.
Mohammad Abdul Hamid
Head of Economic Prosperity Cluster, IKRAM & lecturer in Behavioural Economics, University of Malaya