Panel Cointegration Models And Their Application On The Issue Of Consumption Of City Dwellers In Central China

Nowadays, panel data models is increasingly popular in the field of Econometrics, which could reflect characteristics of a particular object in two aspects-- times series and cross-sections, thus have the merits which the pure time series models and the cross-sections models do not have. With the development of the theory and application in Econometrics, both of the times series data and cross-sections data are needed, and therefore the panel data models are widely used.In the theory section, this paper briefly introduces panel data models, and then introduces several latest panel unit root tests and panel cointegration tests, and the ways to estimate the cointegration equation. Panel DOLS is the pivot of this section.In the application section, this paper mainly studies the consumption of city dwellers of the six provinces in central China, using time series unit root tests and panel data unit root tests. As the result is that there are unit roots and panel unit roots in the consumption series and income series and their hyperbolic logarithm series, the next step is to do cointegration tests. And then we get that both of the two couples have the relation ship of cointegration. Then the task is to estimate the cointegration equations to obtain the marginal propensity to consume and the income elasticity of the city dwellers central China.In the final part, this paper discusses the results of tests and estimations, finds the problems in the consumption of the city dwellers in central China, and makes feasible solutions and political suggestions to the problems.