An Analysis Of The Consumer Behavior Based On Habit Formation Of Urban Residents In China

Although our country’s economy constantly expanded, the rate of consumption continue goingdown.The resident’s consumption increase slowly and low consumption rate in China is also leadingto a decline in the final consumption.According to Chinese per capita income of urban residents and their per capita consumptionpanel data from2002to2008in31provinces,this paper constructed a dynamic panel data modeland in view of the theory of precautionary saving、 habit formation and buffer reserve model. Theconclusions are as follows: the first, China urban residents’ consumption is influenced by the currentincome、the uncertainty of income and the consumption of last term; the earlier stage consumptionworks a slow role to currunt.The uncertainty of the income exists a negative effect to the urbanresidents’ consumption increase, when income uncertainty enhancement, people for the future of theexpected relatively bearish, then people will increase savings to guard against the risk of future hemay face, which leads to less spending. With the development of society, the consumption moreand more proactive and rational, this can yet be regarded as a good signal that China’s consumermarket is continually improved.In the last section,according to the theoretical analysis and estimation results, there are somesuggestions for increasing the consumption level of urban residents in China.