A Research On The China's Wealth Effect Of Stock Market

With the development of the stock market, the relationship between the stock market and economic development becomes closer, many scholars have studied the impact of the changes in stock market wealth on consumption, however, the conclusion is not consistent because of different data and method, with the development of the stock market in china,the number of the participant of the stock market in our country is increasing, can the change of the stock market wealth effect consumption in our country, and can we develop the stock market in order to stimulate the consumption.This paper theoretically analyzes the stock market wealth effect. Mainly from consumer theory, the characteristics of wealth effect of stock market, the conduction mechanism of wealth effect of stock market and the stock market factors affecting consumer spending. and combining our country's actual situation, we analysis the current situation of the stock market and consumption, on this basis, we use the quarter data between 2002 and 2009 to do the empirical research.The study results show that there is no long-term stable relationship between the stock market wealth and consumer spending, the change in the stock market wealth and consumer confidence also doesn't keep a long-term stable relationship. there is no direct or indirect wealth effect in our stock market, also we find there is no long-term stable relationship between consumer spending and consumer confidence, the change of the consumer confidence does not effect consumer spending ,and would not be the impact of disposable income ,consumer confidence may be due to other factors. Impact of the current phase of the main factors in consumption in our country is still the disposable income of residents, and we also find the size of the lagged effect of the disposable income on consumer spending is reduced, thus the most effective way for our government to stimulate the consumption is to increase the disposable income.