Construction Of The Consumption Function Embedded In The Consumer Confidence Index

Accoriding with the traditional economic theories, consumption, investment and net export are the three main powers to drive a nation's economic development. And consumption is the most important one among these three powers. Consumtion, as the last demand, always make up most of GDP in a country. Without consumption, the economy can not operate smoothly.In the background of the economic crisis, the government's decision to expand domestic demand in a timely and far-reaching significance to study the function of the form of China's consumer is more theoretical and practical significance. Current foreign consumption function theory, give more consideration to the impact of income and prices, consumer demand for objective factors, internal research are mostly foreign-based empirical analysis undertaken by the above-mentioned theories. However, the traditional theory of consumption function does not contain the true sense of the impact of consumer demand in the consumer element of subjectivity. In fact, lots of subjective elements, such as consumer psychology, emotional, social, historical and other factors, to some extent which will affect the consumer's spending, and these factors can not be completely replaced by a number of objective factors, or to reflect. To solve this problem, this paper introduces the subjective element variable "consumer confidence index" indicator, evidence of China's consumer confidence index and consumer demand relationship. And based on actual data released by National Bureau of Statistics on China's urban household consumption demand function for empirical analysis, on this basis to get some meaningful conclusions, such as a lack of consumer demand function of consumers of psychological factors can not be an objective variable; consumer confidence consumer demand has a certain guiding role; objective factors on the growth in consumer demand continues to play a leading role; expanding consumption, residents must raise their disposable income, enhance consumer confidence in urban residents, improve the social security system.