Quantitative Analysis Of The Electrical Appliances Buying Behavior Of Rural Residents In China

Since2007, in response to the adverse effects caused by the financial crisis,China has taken a series of "expanding domestic demand, guaranteeing economicgrowth" macro-control policies, and the vast rural market was locked in forimplementation of the policy. Under the policy of promoting electrical appliances inrural area, home appliances industry sales has been strongly growing, when comparedto its requiring sales from national policy guidance, a big gap still exists, whichrequires us to think about factors constraint household appliances selling besidespolicies. This paper attempts to analyze the durable goods purchase decision-makingmechanisms at the micro level of rural residents, we choose the durable goodsconsumption (S, s) theoretical model to depict purchasing behavior of rural residents.Grouping of income levels and regions hopes on one hand, to give a full descriptionand more in-depth of rural residents' durable goods buying behavior, on the otherhand, to find a new direction exploring and reactivating of the rural consumption ofdurables has a very important practical significance.Durable goods consumption (S, s) theoretical models can more accuratelyportrait for the family's choice whether to purchase durable goods decision-makingbehavior, the model assumes that consumers make the decisions of whether to buydurable goods following the (S, s) rules, which is that at the beginning of the period,it compares the ratio "S" of durable goods stock and target stock with a critical valueof "s", and then make the appropriate decision: If "S" reaches the upper bound"s",consumers will sell the durable goods, otherwise, if it reaches the lower bound"s",consumers will purchase the durable goods, in short, consumers will make corresponding adjustment to the target stock. This paper selects the China Health andNutrition Examination Survey (China Health and Nutrition, Survey, CHNS) data inrecent four years, based on Durable goods consumption (S, s) theoretical model,using the Probit model to analyze rural residents' electrical appliances buyingbehavior under different income levels and in different parts.In this paper, to analyze durable goods purchasing behavior of the rural residentsunder different income levels, we divided the data sample into these three categories:low-income families, middle-income families, as well as high-income families.Through CHNS2000,2004,2006and2009, four years of micro-panel data, wecarried out empirical analysis of rural residents electrical appliances purchasingbehavior on different income levels. We got the following conclusions:(1). To increase the consumption of durables of the low-income groups in rural areas,the focus should be on the refrigerator and washing machine, subsidy policy andthe further improvement of income assist the achieve the desired results.(2). There is a large consumer potential of middle-income groups in rural areas, asteady income and a desire to improve living standards will form the actualdurable goods purchasing power.(3). For high-income groups in rural areas, the electrical appliances is basicallysaturated, the market needs to provide a higher quality of appliances to satisfy theneeds of this part of the group.In order to analyze durable goods purchasing behavior of the rural residents indifferent parts, we divided the nine provinces into three regions. Liaoning Province,Jiangsu Province and Shandong Province is divided into the eastern region,Heilongjiang Province, Henan Province, Hubei Province and Hunan Province isdivided into the central region, for the rest of the Guangxi Province and GuizhouProvince is divided into the western region. We carried out empirical research onthese three regions, and got the conclusions as following: (1). Income of the eastern part rural residents is relatively high, so is their livingenvironment. In addition to provide more high-grade colored TV to meet theirneeds of rural residents of the eastern part, the purchasing power of therefrigerator and washing machine still exists. We may also attempt to providecars to this part of the rural areas.(2). The central regions of rural residents have a high owner rate of the colored TV in2009, even exceed the eastern regions. The implementation of the policy "homeappliances" strongly affects the purchase of washing machines and refrigeratorsin central region. The consuming power of central region cannot be ignored,instead, it should be the focus of our government.(3). In the western region, the income of rural residents is in slow growth, and theirliving environment is relatively poor, the infrastructure is not complete. Eventhough the two provinces we selected did not show the expected results, we stillbelieve that increasing durable goods purchase of rural residents in the westernarea, the focus should be on the improve of consumer infrastructure andimplementation of the policy of government subsidies.