Habit Formation And Consumption Behavior Of Urban And Rural Residents In China

After1990's, with the system of socialism market economy gradually established, China'ssystem foundation of urban and rural residents consumption produced very big change, which causethe greater change of consumption behavior of urban and rural residents, Especially since the midninety's, China's consumption rate of urban and rural residents has reduced year by year. Accordingto statistics, China's consumption rate of residents has decreased by45.21%in1997to35.11%in2009, as is the lowest since the reform and opening up, while the savings of urban and ruralresidents has grew rapidly, by the end of2009, China's Renminbi deposit balance of urban and ruralresidents has more than26trillion yuan, which amount to a percentage of GDP as high as75.58%.To face this "low consumption, high savings" phenomenon in resent years in China,"the law of thePeople's Republic national economic and social development of the twelfth five years (2011-2015)plan" also explicitly pointed out that establishing the long-term mechanism of expanding consumerdemand, as the strategic emphasis of expanding domestic demand, improving consumerexpectations and promoting the consumption structure upgrade, further releasing the consumptionpotentiality of urban and rural residents, promoting the benign interaction of investment andconsumption, promoting economic growth to coordinate transform form of relying on consumption,investment and export. Why would have this "low consumption, high savings" phenomenon inrecent years? The issue has the attention of many scholar, they generally thought that, along withthe marketization reform, the motivation of precautionary savings of the residents got stronger,which lead to insufficient consumption. But research has shown that both at home and abroad, thehabit formation is the important factor of consumption to fall, saving rate rise. But studying theconsumer behavior of urban and rural residents is still at the beginning at present in our countryfrom the perspective of habit formation. So this paper will draw lessons from western habitformation theory and model framework for China, which will study the consumption behavior ofurban and rural residents with the comparison system, deep theoretical and empirical analysis, so asto try to explain "low consumption, high savings" phenomenon in recent years in China.Western economic theory born out of the mature market economic system, But China is still intransition period from a planned economy to a market economy. So China has its own uniquecharacteristics in many economic problems. Therefore, the paper will be combined with the actualsituation of urban and rural residents consumption. First of all, It will construct the theoreticalmodel framework of consumption habit formation of urban and rural residents in China; Secondly,It will make use of the suitable sample data and carry out the empirical test; Finally, It willsummarize and draw some main research conclusions, and then put forward the corresponding policy. The specific content of the paper is as follows:The first chapter is introduction. It mainly discusses the research background, the purpose andsignificance of the study, summarized the research developments of habit formation, and explainsthe research idea and methods, the content and the main innovation points of the paper.The second chapter introduces several western representative model of consumption habitformation. It mainly introduces the western representative model of consumption habit of formation,further understood trends of research and development process of habit formation model.The third chapter introduces the theoretical model framework of consumption habit formationof urban and rural residents in China. To the west representative model of consumption habitformation as reference, It will be combined with the actual situation of urban and rural residentsconsumption and constructed the theoretical model framework in accordance with consumptionhabits formation of urban and rural residents in China.The fourth chapter is used to analyze habits formation how to influence consumption behaviorof urban residents in China under certainty equivalence and uncertainty equivalence respectively. Itwill make use of the theory model framework of the third chapter and analyze habits formation howto influence consumption behavior of urban residents in China and analyze habits formation how toinfluence consumption behavior of urban residents of high, medium and low three different incomelevels in China and analyze habits formation how to influence all kinds of consumption spending ofurban residents in China.The fifth chapter is used to analyze habits formation how to influence consumption behaviorof rural residents in China under certainty equivalence and uncertainty equivalence respectively. Itwill make use of the theory model framework of the third chapter and analyze habits formation howto influence consumption behavior of rural residents in China and analyze habits formation how toinfluence all kinds of consumption spending of rural residents in China.The sixth chapter is research conclusion and policy suggestions. According to the empiricalanalysis, research conclusions were drawn, And then based on the concrete parameters of empiricalanalysis,some suggestions were put forward for expanding consumption demand of urban and ruralresidents in China.