The Research On Chinese Residents' Consumption Behaviors

Chinese economy has been growing rapidly since the reform and opening. However, with the high economic growth, some "unusual" phenomena in domestic consumption appear, including low ultimate consumption rate, high investment rate at the macro level and the constantly decreasing consumption propensity of residents at the micro level. Consumption, which is an important macroeconomic variable in the market economy, plays a vital role for stimulating economic growth; therefore, we must pay more attention to those anomalies.Synthesize the researches of resident's consumption behavior resulted from domestic scholars, most scholars lay particular emphasis on qualitative analysis, in contrast, the researches of quantitative analysis are lack, and did not form a complete system. The main reason is the influence by related data access restrictions in our country. However, consumer behavior is based on the household utility maximization. Although consumer behavior is influenced by the socio-economic development, the social system and the individual's own preferences, there is no fixed pattern, or even if there is a fixed pattern, it may not be stable. Therefore, in order to study the activities of the internal laws of the consumers, we must do a large number of empirical researches based on statistical analysis, to explore the interaction of various variables path about consumer behavior.According to the objective fact of the insufficiency of urban and rural residents' consumer demand of China in recent years and the constantly decline of the propensity to consume, this paper discusses Chinese resident's consumption behavior in theoretical and empirical analysis, based on the China General Social Survey (CGSS) household data in combination with habit formation preferences of the consumer model. As consumers' preferences depend not only on current consumption, but also on past consumption levels, habit formation affects consumer decisions, and thereby affects consumer utility, so it is of theoretical significance to analyze Chinese resident's consumption behavior in the perspective of habit formation. In addition, it is also of practical significance to have a profound understanding of resident's consumption behavior and to effectively improve people's consumption capacity and the living standards.The whole paper consists of four chapters. It is organized as follows:Chapter one, introduction, the theoretical background of this paper is analyzed. Literature review, the deficiency of current research is pointed out through reviewing the foreign and domestic literature, and the basis thought of this paper is given. And the organization of the whole paper is laid out.Chapter two, this paper introduces the theory of consumption and utility functions. First, we introduce the evolution of consumption theory briefly, and then introduce the consumption habit formation theory. Second, we describe the utility function, including traditional utility model, and the formation of consumption habits model, and Dynan model- the econometric model in the empirical analysis part.Chapter three, firstly, basing on the China General Social Survey micro data and the econometric model, we analyze the residents'consumption expenditure and the average propensity to consume respectively in the perspective of habit formation, estimate the habit formation coefficient, analyze the influence of habit formation on APC, and give an explanation to habit formation, finally we get three conclusions: The habit formation affects residents'consumption behavior, and it is more prominent for rural residents than for urban residents; The habit formation coefficients are very different between Chinese 28 provinces; Consumption habit is negative related to APC, and the main reasons for a constantly decreasing APC among Chinese residents are the higher habit formation coefficient and the increased uncertainty of income and future expenditure.Chapter four, according to the empirical study result, we propose some policy suggestions:Getting the expansion of aggregate demand, and effectively stimulating consumer demand; Effectively improving the urban and rural residents'incomes, and leading the reasonable customer expenditure anticipation; Reforming the system of income distribution, and gradually narrowing the income gap between urban and rural residents; Establishing the risk-sharing mechanisms among nation, collectivity and individual; Improving the existing capital market to optimize credit structure, and developing consumer credit strongly.There are two main innovations of this paper-- data selection and variable selection. Firstly, through the creation of econometric model, this paper used micro-survey data to analyze explanatory variable for urban and rural residents in China in the family utility maximization framework. Secondly, used the customary form of consumer behavior as explain variables, this paper separated from the impact of the perspective of the formation of habits and analyzed the consumer behavior of urban residents and rural residents.