A Study On The Consumption Behavior Of Urban Household In Guangdong

As an important course in economic activity, the consumption will perform a more and more outstanding function with the rapid growth of economy, After the 21st century. The seller's market was replaced by buyer's one, where the supply of most commodities exceeded their demand. The market competition intensified, and the deflation appeared in recent years. The distending financial and the positive monetary policy, such as lowering the interest rate of bank for eight times since 1998, had been taken continuously for several years. A certain result was obtained, but it is not ideal, furthermore, it isn't permanent. It is the ultimate power of economic growth to enhance the domestic demand, and it is lasting and long-time to drive and lead the positive consumption of residents. This dissertation made a study on the urban Guangdong consumption behavior after the opening and reform on the basis of the newly classical consumption theory and the practical condition of Guangdong.Based on the research into consumer behavior, this dissertation come up with hypotheses and models of consumption function in Guangdong. Friedman' permanent income hypothesis and Modigliani's life cycle hypothesis, can preliminary explain the circumstances in Guangdong during 1982-1991, can explain totally explain the consumption during the years of 1992-2004. Compared with the phase of 1982-1991, consumption of urban households depend mainly on their permanent income during 1992-2004. So, Adding the permanent income can stimulate consumption betterly.