Research On The Smoothing Consumption Behavior Mechanism Of Chinese Farmers With The Household And Social Network Level

Owing to the seasonal production,the unpredictability of agriculture technological change and natural disasters,the income of farmers often tend to be fluctuated.The volatility of income and emergencies finally transmitted to the consumption of farmers, it lead to a deviation from the daily consumption.This substantial fluctuations of consumption is not conducive to individual utility maximization and long-term macroeconomic development.To remained the consumption stable and balanced in the life cycle and maintain a steady stream of consumption, which is the essence of consumption smoothing.It is the direction of individuals and government wisdom on how to spread the risk and to maintain consumption relative stability. On the one hand, the government and the market will set the risk diversification mechanism to smooth consumption, such as social security systems and commercial insurance. On the other hand, the rational individuals can spontaneous dissaving or borrowing to maintain consumption levels to disperse risk.It is the behavior for risk avoide of coordination and intertemporal consumption decisions within family and social networks. Farmers in the risk impact and consumption decisions are rational, however,it is the result of institutional constraints such as farmers unique characteristicsand endowments of farmers.This dissertation notes that Chinese farmers in the relations of family unit and complex social network.This dissertation try to explore the mechanism of consumption smooth behavior under currtent risk and institutional constraints.And try to find method to improve the effectiveness of consumption smoothing mechanism under current institutional changes.Orinially,from the framework of consumption theory,this paper analyzes existing research results.It summarizes the current and intertemporal consumption theory, the consumption of rational expectations theory, the theory of precautionary savings, liquidity constraints hypothesis, buffer storage model of basic research methods and frameworks, as well as from the family level and the social dimension of inter-temporal consumption instructions. First, the existing household level consumer behavior study found that western literatures focuse on the theoretical framework of the life cycle theory, without the introduction of consumer habits and cultural background of the object of study. A large number of Chinese literatures focuse on the causes of China's high savings rate which has ignored the China's unique cultural background of savings for consumption smoothing. Second, from the respective of current social networks, the research on the Western Development Economics focuses on the African tribes and the Indian caste system, the current study is lack of social networks in rural China.Meanwhile, the Chinese scholars tend to consider the non-formal financial of social network of relations,and ignore the final flow of lending practices-smoothing consumption behavior. Third, in the analysis of the microscopic mechanism behind the system, a lot of research focuse on Chinese fiscal decentralization and social security system, and ignore the link of decentralization risk, social security resist and consumer behavior.In addition, this dissertation elaborates and summarizes behavior characteristics of Chinese rural households'smoothing consumption from different periods and social changes.Such as the periods of Republic China, the period of People's Commune,the period of economic transformation. It finds that rural clan and private lending played main role in spreading risk and smoothing consumption in the period of Republic of China. Collective distribution system had great impacts on behavior mechanism of smoothing consumption during the period of People's Commune. In the period of economic transformation, social security system played initial effects and lend-borrow actions based on social network relationship played roles in smoothing consumption.This dissertation analyzes the behavior mechanism of smoothing consumption from the perspective of rural households.Firstly, under the gender differences led by family planning policy, parents of rural family in China make competitive savings for sons to get a better place on marriage market,while the sons give parents'old age support and fulfill their filial duty. This implicit contract enforcement mechanism formed by Confucianism Culture is an implicit behavior mechanism within the family intergeneration to resist risks and smooth consumption. Second, this dissertation establishes a mathematical model of a three competitive savings and raising children for old age, and use the Chinese financial investigations to empirical text the household level consumption smoothing mechanism.Meanwhile,the results show that: at the local concept of rasing child for old support, it will increase the gender imbalance caused by increased competitive savings rate.The saving rate of son family has substances feedback higher than that of daughter family, the parents will make use of the concept of the strength of the raise children for old age to adjust the savings lifetime smooth consumption.Under the perspective of the social network to analyze the agriculture household smoothing consumption mechanism:firstly, with the characteristics of the pattern of China's rural difference, social network is universally regarded as China's rural credit guarantee mechanism. On the one hand, social network is able to provide informal credit to reduce the liquidity constraints of the agriculture household and the precautionary savings among the members of the social network. It enables farmers to obtain relative balanced cash flow and to realize smooth consumption. On the other hand, long-term favor association is considered to be a specific form of risk diversification to realize smooth consumption. Secondly, this dissertation supported through the Chinese Financial Investigation which including1951micro-data of rural families from the province of Hunan, Yunnan, Heilongjiang in China, the result shows that the social network characterized by cash gift has a strong smoothing effect on commodity consumption. The agriculture household smoothing consumption mechanism works through private lending and favor association.The smoothing consumption mechanism from the aspect of family and social network can be separately defined as "Deposit Type " and "Mutual Type". The common feature between them is the spontaneous risk dispersion behavior mechanism which can smooth life consumption and time consumption through cross time and risk dispersion behavior. Therefore, this dissertaion analyzes the China's micro situation on the basis of expanding Cocco's benchmark model through mathematical derivation and empirical study, which set hypothesis on preference, time parameters, credit behavior and risk.The empirical study result is:China's spontaneous consumption smoothing mechanism is due to the systemic risk which is brought by the institutional changes.This paper also analyzes the microscopic behaviors caused by the institutional changes from the aspects of China's rural production management system, social insurance system and financial systemFinally, we can draw the conclusion that the "Deposit Type" smoothing consumption behavior mechanism works by the Chinese farmers'competitive family savings and"bring up their children for old age support". The "Mutual Type" smoothing consumption behavior mechanism works by private lending and favor association. The selection of type of spontaneous smoothing consumption behavior mechanism is based on rationally avoiding systemic risk which is brought by institutional change.The following policy recommendations to achieve the purpose of smoothing consumption are as follows:to construct Chinese characteristic rural consumption financial system and the rural social security net; to promote the development of rural commercial insurance; to promote the construction of informal financial system on the basis of the social networks; to promote the development of core family production and business operation system, etc.