KUALA LUMPUR (Oct 15): There are huge disparities in the Middle 40 (M40) income threshold in the various states across Malaysia, according to Khazanah Research Institute's (KRI) latest report.

The report entitled "The State of Households: Different Realities” showed national household income average for the M40 is between RM4,360 to RM9,619 a month, but on a state level, this varies largely.

“For instance, a T20 household in certain parts of the country may now have an income level similar to a B40 household in other parts of Malaysia.

“Therefore, policy must be set within the right local context, taking into account different income thresholds in different states,” the report said.

It cited the example of a household in Kelantan that earned just above RM5,870, but is considered to be in the top 20% (T20) of households of the state. However, this same household would be part of the M40 on a national level, and in fact in the bottom 40% (B40) of households if they are in Kuala Lumpur.

KRI said that only Melaka, Johor and Penang coincide roughly with the national threshold.

“This means only around 20% of the population in the country can be roughly segmented using the national threshold into three income groups,” KRI said.