Research On Growth Of Chinese Household's Consumption And Its Welfare Effects

Consumption, investment and export are the contributor of the GDP, in order to keep a sustained and stable development, the country with a great population like China must depend on consumption growth. Since the1990s, with the development of our economy, the residents'income has always been rising. In accord with that, the expenditure of the urban residencies'consumption rises as well. However, the rate of consumption increases is much slower than that of income, so Propensity to consume declines and the consumption rate falls, Improve the growth of consumption is the emphasis of the current macroeconomic policies. This thesis, in accrod with the decline of the residents'Propensity to consume and the consumption rate, analyze the factors of consumption growth, and study the effect of the consumption growth, having both theoretical and Practical meaning.This article analyzes the Status of China's resident's consumption firstly. We find that Propensity to consume declines and the consumption rate falls. Than this article builds up a dynamic data model to analyze factors affecting consumer growth base on the research of consumption volatility. The result shows that Consumption volatility. Urban residents and rural residents have preventive savings motivation.At last, this article uses new model based on recursive preferences function to measure the welfare effect of consumption growth. When the consumer is weak, increasing the consumption growth can generate greater welfare gains. Reducing the consumption growth is leading to greater welfare losses. Welfare Effects of consumption growth has a significant difference between urban and rural areas.