Chinese Urban Residents Consumption Level Of Uncertainty In Economic Analysis

This thesis begins with the environment of this topic, the low level of inner consumption. It tries to give an answer from the angle of precautionary saving.After reviewing the major consumption theories, two shortages are raised: the uncertainty index and the regression model. Accordingly, here I come up with two solutions: the principle component analysis and ECM model.Before modeling, the thesis fully discusses the range the uncertainty index should cover and how it should be measured. This index then is decided to contain the fluctuation of both income and consumption instead of focusing only on one factor, and it should be measured by the squared resid of the time serial simulation of variables, rather than commonly used group variations or other indirect indices, which are quite different from formal researches. Besides, the accuracy of the ECM model will be greatly underlined.The first step of modeling is to get ready the uncertainty index, the combined fluctuation of both income and consumption. Then the form how each independent variable should be connected with dependent variable and the lag value of each independent variable are examined with extra care. This finally resulted in the long term model after several adaptations. As usual, the unit root test is done( with ADF), and the ECM model is gradually adapted to the final equation.The result demonstrated apparently the uncertainly, contributed mainly by the expenditure fluctuation, has a major effect on consumption decision. This is due to the fierce reformation of both revenue distribution policy and the welfare policy. The sources of personal income become various and...