The Characteristics And Empirical Evidence Of Family Large Consumption Or Expenditure

A representative family allocate it’s limited income or wealth toward all kinds ofgoods, from which the family can acquire a maximal utility. This is a basic analyticalframework of modern consumption theory. There is an implicit assumption in thisframework. It is that the demand amount of all goods and services are decided at thesame time. Obviously, this concept is not consistent of the reality action of Chinesefamilies. At the fact, frugalness and willing to save are virtue of Chinese families.They always save the rest of income after the daily consumption, thus they haveenough money to deal with some large expenditure such as medical expenditure orhouse purchase. In this light, it is not a truth that the demand quantities of all goodsand services are decided at the same time. It is a pity that the existing papers ignoredthis problem.This paper focus on large consumption of families based on the consumptioncharacteristics of Chinese families. We research the consumption characteristics withmicrocosmic data and macroscopic data. Qualitative research and quantitativeresearch are introduced in our paper. At the same time, we explain the phenomenon ofeconomy and put forward some policy proposal. There are three parts in this paper,which introduce the education consumption, medical consumption and houseexpenditure. The main innovations are exhibition as follows:Firstly, mental accounting, which is a concept of psychology, is lead into thetheory of habit formation in this paper. We separate mental accounting into two:accounting of consumption in daily life and accounting of large consumption fordisposable. Theoretical model and empirical research suggest that large consumptionfor disposable present durability and characteristic of luxury. From this conclusion,we can see the reason of increasing income can promote hot point of consumption. At the same time, the conclusions give a theoretical explanation of some economicphenomena, such as the rapid growth of car consumption.Secondly, this paper analysis the impacts of population age structure of urbanresidents on household educational consumption, which by means of panel data ofthirty provinces and generalized moment method. We find that the householdeducational consumption of urban residents has a positive correlation with the ratio ofworking population. This means that the expenditure of school education which aftervoluntary education is the main part of household educational consumption.Thirdly, we test the farmers’ house purchasing by means of the CHNS data. Wefind that whether the farmers to buy a house is independent of whether this family hasa son, which has a positive correlation with income and household size. The value ofthe house they bought has correlation with income the age of the head of thehousehold. We also find that the farmers which have a boy will invest more inbusiness. So, the action of invest substitute for the house purchasing to some extent.Fourthly, we research the medical expenditure by means of the CHNS data andHeckman method. The result shows that if people seek medical advice lie on age,gender and so on. The medical expenditure lies on the disease, rather than otherfactors.