Correlation Study Of Chinese Advertising And Household Consumption

Expanding domestic demand, especially consumer demand, has become important connotation of Chinese economic development pattern transformation, being a major economic issue related to national economic development strategy. Based on the economic law of consumer demand rising and Chinese household consumption’s situation, expanding domestic demand mainly includes increasing consumption level and promoting consumption structure. In addition, advancing and deepening of Chinese expanding domestic demand strategy are directly related to economic fluctuations and consumption fluctuations. Thus, expanding domestic demand should also include smoothing consumption fluctuations.Promoting consumption and smoothing consumption fluctuations are explainded as advertising’s important economic functions in many theoretical literatures. Chinese statistics also show the possibility of the two advertising’s economic functions. In the context of expanding domestic demand strategy’s urgent implementation, this study will focus on the correlation between advertising and household consumption in China, including questions on whether Chinese advertising pulled the increase of consumption level and promoted the consumption structure upgrade after1981, and whether Chinese advertising smoothed consumption fluctuations during the financial crisis of2008.Conclusions are inconsistent in many empirical correlation studies on advertising and household consumption. This study adopts logical positivism, quantitative research method, combining aggregate analysis with structural analysis, static analysis and dynamic analysis, establishing economic mathematical model about advertising and residents’consumption. Based on relative economic theoretical analysis and research conclusions, this paper raises seven hypotheses on the relationship between Chinese advertising and residents’ consumption, establishes economic mathematical models and confirms hypothesis’validity using our country’s data. Some important conclusions are drawn from the test results.The paper concludes that Chinese advertising is an important economic factor to boost the growth of residents’consumption level. In relatively affluent urban areas, advertising has stronger pulling power on residents’consumption level than supply factors. Advertising’s influence on rural residents’consumption level is expected to be greatly enhanced with the advance of urbanization. Although consumer advertising elasticity is not high at present, it will go through changes from slow growth to rapid growth in ten years. What’s more, the paper concludes that Chinese advertising accelerates residents’ consumption structure upgrade. Advertising has stronger pulling power on enjoyment and development-oriented consumption expenditures than on survival-oriented consumption expenditures. Short-term changes of rural residents consumption structure is little influenced by advertising. Compared with logistics and online banking transactions, online advertising is more significant driving factor in Chinese e-commerce trade growth.Besides, the paper concludes that Chinese advertising has economic function of smoothing residents’consumption fluctuations. Enterprises increasing advertising spending earned more sales revenue than those cutting advertising spending during the financial crisis of2008. Advertising brought about counter-cyclical sales growth. Advertising’s promotional effects decrease more rapidly for enterprises cutting advertising spending.In conclusion, the basic conclusions of this paper are as follows. Besides supply factor and income factor, Chinese advertising has significantly positive effect on household consumption. Advertising has promoted and will further promote household consumption level. Chinese advertising boosts all eight type consumption growth, especially development-oriented consumer spending. Chinese advertising is conducive to residents’ consumption structure upgrade. Enterprise counter-cyclical advertising generally realized counter-cyclical sales growth after the2008financial crisis. These enterprises’advertising is relatively slower in deterioration. Chinese advertising can be called the accelerator of economic development, the shock absorber of economic fluctuations and the Archimedes’ lever of Chinese economy.This paper makes suggestions on development of advertising literacy education and Chinese advertising industry. One conclusion is drawn that advertising is one of the important economic factors helping boost consumer spending. However, government departments and common people have long-term discrimination and misunderstanding against advertising, unable to make objective evaluation on advertising economic function. Accelerating development of advertising literacy education should be advocated as to create favorable social conditions for Chinese advertising industry. Moreover, Boosting the development of Chinese advertising industry is necessary because advertising’s strategic significance concerning Chinese economy is demonstrated in this study. Chinese advertising’s effect on residents’ culture consumption and information consumption is very outstanding and its impact on rural residents’ consumption will be increasingly critical. Chinese advertising industry suffers from small enterprise scale and lack of policy supply. Thus, coordinated development of advertising industry and key industries, rural advertising market, domestic advertising enterprises’ scale levels and encouraging guidance in advertising industry policy system deserve special attention in the aspect of boosting the development of Chinese advertising industry.The idea of the continuous research mainly includes three aspects. First, enrich achievements of empirical correlation study of Chinese advertising and household consumption by using more diverse consumption dimensions. Second, besides household consumption, correlation study of Chinese advertising and investment or export will be carried out to get more fully understanding of Chinese advertising economic contribution. Third, expand researches on other Chinese advertising economic effects in order to build up relatively complete system of empirical research on Chinese advertising economic functions.