Structural Identification And Promotion Mechanism Of Chinese Household Consumption Behavior

The problem of insufficient consumption and high savings rate of Chinese households has always been a concern.Under the background of the current international situation full of instability and uncertainty,continuous expansion of the domestic demand market and efforts to smooth the domestic cycle are the fundamental guarantee for achieving highquality economic development.Moreover,the promotion of household consumption is the foundation of expanding domestic demand.Insufficient total consumption and unbalanced consumption structure are typical characteristics of Chinese households' consumption.Chinese households have low levels of social security,face great income risks and medical expenditure risks,and China's ageing rate and inequality have increased.These are the keys to further promoting consumption and expanding domestic demand.In-depth study of the behavioral characteristics and structural heterogeneity of household consumption is of great significance for enhancing the basic role of consumption for economic growth and improving the system and mechanism for promoting consumption.The existing researches on Chinese households' consumption behavior is mainly based on reduced-form regression.Those researches are not strictly based on life cycle theory,cannot link economic theory closely to micro data,do not consider the heterogeneity of household preference,no rigorous mechanism analysis,and policy simulation are not possible.Thus,there are very big defects in the analysis of households' consumption behavior.Different form the existing literatures,this paper is strictly based on the framework of life cycle theory and fully considers the households' heterogeneous preferences.Based on structural estimation of the life cycle model,this paper estimates preferential parameters such as discount factor,risk aversion coefficient and bequest motive,and studies the heterogeneous effects of precautionary saving,borrowing constraints,income shocks,and medical expenditure risk based on counterfactual simulations.Thus,this paper can effectively reveal the structural characteristics of households' consumption behavior,and provides basic structural information for the policy combination and implementation path of improving the system and mechanism of promoting consumption,enhancing households' consumption willingness and consumption ability,and accelerating the internal cycle.Firstly,this paper collated macro and micro data from the official website of the World Bank,the official website of OECD,the China Statistical Yearbook,the CFPS database,and et al Thus,this paper obtained typical facts about the consumption behavior of Chinese households.Secondly,based on the structural estimation of the life-cycle consumption-savings model,and on the basis of effectively identifying the structural parameters of the model,this paper accurately reveals the behavioral characteristics of households' consumption smoothing and the rural-urban differences.It is found that compared with urban households,rural households have stronger risk aversion and value current consumption more.Moreover,rural households' precautionary saving motivation,as well as their response to borrowing restrictions and income shocks,is significantly stronger than urban households.Therefore,perfecting the social security system,developing consumer finance,and improving household permanent income are the keys to promote household consumption.Thirdly,based on the traditional life cycle consumption and savings model,this paper further establishes a consumption-saving life cycle model with medical expenditure risks,bequest motives,health factors,retirement factors,minimum living security and other elements to analyze the internal mechanism of consumption and saving behavior of Chinese elderly and the heterogeneity of urban and rural househods.It is found that compared with urban households,rural households face greater risk of medical expenditure,are more affected by medical expenditure risk,and are less affected by bequest motivation.Therefore,the government should strengthen the construction of medical security,especially for rural households,to promote the consumption of the elderly and boost domestic demand.Finally,based on CFPS and CHFS micro data,we describe the typical facts of income dynamics and income mobility of Chinese households,and study the structure optimization of income shock and its consumption promotion mechanism.It is found that optimizing income shock structure and eliminating high-order income risk can improve income mobility,reduce the risk of income stagnation of low-income groups,promote poverty alleviation of poor groups,reduce inequality and reduce precautionary savings.Therefore,to resolve the negative income shock and extreme income shock and optimize the income shock structure,first,the government needs to protect employment,improve the level of unemployment insurance,and reduce the labor market friction;second,the government needs to further improve the vocational training system and vocational promotion system.