Empirical Study Of Housing Reform, Liquidity Constraints And Insufficient Consumption Of Urban Residents

Since the late 1990s, our country has been facing the problem of insufficient consumer demand, total domestic consumption and economic development not form good cycle, and this structural imbalance threatens the sustainable development of economy. At Urban areas, the marginal propensity to resident consumes declines from 0.709 in 1998 to 0.62 in 2009. Why consumption of residents declined significantly after the late 1990s? Many scholars have extensive discussions. Most scholars think that this may be related to several major reform of the economic system. Studies indicate that people need to improve their housing conditions after they have solved food and clothing problems, and form the rigid needs for house. Housing Reform that stops welfare housing distribution and commercialization of housing causes most residents face enormous purchasing house expenses, and this expenditure is most urban households are directly predictable, so this expenditure becomes a directly foreseeable rigidity of expenditures. Thus, Housing Reform plays an important role in reform and opening up process, has a significant impact on the lives of residents, and then has the profound influence to macro economic.What kind of influence does Housing Reform have to a microscopic family and to macroeconomic? This article has constructed an introduction buying homes disbursement fluid restraint model, to compare the different influence to the resident with or without the purchasing expenditure. Afterward supposing other situations certain, analyze microcosmic mechanism which house price rise cause consumption of residents to fell, to explain the inhibitory effect of house price to consumption, and to provide a theoretical model for empirical testing. This article not only discuss Housing Reform causing housing wealth effect to the resident who have house, but also discuss liquidity constraints effect to the resident who haven't house, and pointed out reasons that Housing Reform incur most of the residents arising from the liquidity:the commercial housing policy stressed "only sells not rent"; Housing finance development lagging; housing supply out of purchasing power of residents and the urbanization advancement speeds up. These reasons cause the majority of residents to occur liquidity constraints. When these conditions have not improved, the rise in house price means that the likelihood of occurring liquidity constraints increases, and dwellers must deposit more wealth for buying homes. Thus, when housing prices rise, residents will choose to reduce consumption and increase savings.To confirm the above viewpoint, we used the macroscopic data from 1991 to 2008 to carry on examination, founding before 1999 the lag phase of house price promotes consumption; After 1999 the lag phase of house price restrains consumption growth, which indicates that the majority of residents after housing reform must consider liquidity constraints in anticipating buying house. Based on this, we have made 1999 to 2008 the national panel data analysis and separately made the east, the middle, the western regions of the panel data analysis, to draw the following conclusion:First, in the national average level, lag one phase house prices to rise 1 Yuan cause average consumption expenditure of households decreased 0.16 Yuan, verifying the house price rise not only indicate that they face in the future the increasing possibility of the liquidity constraints, but also that they have to save more wealth for purchasing house, which makes residents have to further reduce current consumption and increase savings. Second, the sensitivity to house price rise which the central and western areas of resident's consumption level have are the same, but are more sensitive than eastern area's, because the average disposable income of residents of the eastern is much higher than the central and western areas, while the difference of residents'income of the central and western regions is minimal; When average house price of the eastern, central and western regions are taken into account, we find:residents in the eastern region is greater impact on consumer demand from Housing Reform than in the central and western area's, while the impact from Housing Reform on consumer demand of the central and western area's residents is almost the same. The reason is the house price to the eastern region far exceeds the central and western areas, while the central and western regions of the price are little difference.Based on the theory of liquidity constraints, this article researches the mechanism of insufficient consumption by Housing Reform, and uses the macroscopic data to conduct the empirical study to the relationship between Housing Reform and dwellers consume and the influence, trying to realize the theoretical innovation, provide theoretical support to understand the consume behavior of residents, and enrich experience research about the relation between Housing Reform with resident's expenditure. This article explores the impact of housing reform from the macroscopic data; consequently this impact needs to research from the microscopic data.