The Dynamic Effects On Aggregation Consumption Of Chinese Residents Based On House Price Rising

Recently, with the real estate market booming, relationship between the price of real estate and the consumptions attract more and more the scholar’s attention all over the world. Different from other Investment goods, the real estate has dualities which are invested and consumption. The investor could achieve hedging and values added through invest the real estate. Residents can meet the demand for housing consumption through buying house. The investor in housing will attain profit when the price of the house is rising. They can get more loans to increase the current consumption by realizing the profit or mortgaging in the market. We call the prices rise stimulating dweller consumption as wealth effect. The price of housing rising will increase the rent and the cost of purchase in future for renter or buyer. They save more for renting or buying which lead to squeezing current consumption. We call the effect price raising leading to squeezing current consumption as extrusion effect. Usually, there are real estate investors and potential buyers in a country or area. So would the price raising promote or squeeze to the consumption for the resident? This is the focus of the researching in the article.Today, many domestic and foreign scholars research on the impact of the real estate consumption intensity and the main transmission mechanism. But there is no consensus conclusion. Some scholars believe that the house price rising will promote dweller total spending and give the perspective of empirical support. Some scholars believe that the effect that housing prices will restrain dweller consumption is not notable. These studies all without exception that the real estate booming on residents’consumption overall has a single constant effect. The relationship between wealth effect and extrusion effect does not change by the housing price and the macro data give empirical support. However, the author thinks anything and the phenomenon is a limit for development. Or it will be too much of a good thing. There is no exception of the real estate market’s impact. The difference between wealth effect and extrusion effect will change with the rising prices. When prices are still at a relatively low level, the wealth effect is bigger than the extrusion effect, which leads to an overall increase in consumption. However, once house prices reached a high level, the house price to continue to raise the effect on consumption will produce qualitative change, the effect the house price continue to rise will produce qualitative change. The wealth effect will be smaller than the extrusion effect, then the real estate market boom will extrude residents overall consumption. In other words, the effect is inverted U curve. Namely the price rising promote firstly and then inhibit overall consumption of residents.This article will research on the impacts of housing price rising on Residents’ consumption from two aspects. The one is to use the indifference curve and intertemporal choice theory to explain the rising prices of different individual consumer behavior and the influence of the rising prices of residents consumption overall effect of the inverted U shape curve theory. The other is from the collection of the macro data model, from the perspective of evidence to verify the prices rise to promote inhibition after consumption of this hypothesis. The specific structure and content are as follows:The first chapter is introduction. As a full introduction and questions, it is mainly on the research problems, research significance, research process and some important concepts and research method, framework and novelty are introduced.The second chapter is literature review. At present, domestic and foreign scholar’s reseach on the real estate wealth effect comprehensive. These results mainly focus on whether and how the real estate price fluctuations affect consumption, comparison research on price volatility and stock price undulation consumption, different country real estate wealth effect. However, the existing literature has neglected the real estate dual on the influence of household consumption, assumed that prices continued to rise in single direction effect of consumption. In order to make up for the inadequacy of existing research, the author puts forward prices continued to rise in influence upon consumption pour U hypothesis, and from the two aspects of research:firstly this article is the use of indifference curves and intertemporal choice theory to explain the rising prices of different individual consumer behavior and the influence of the rising prices of residents consumption overall effect inverted U curve theory. Secondly, this article chooses the30provinces data from1999to2010as sample and set model to prove the pour U hypothesis.The third chapter is study design. This chapter firstly analyzes the three kinds of individual consumer behavior under the influence of rising prices using the indifference curve and intertemporal choice theory from the static and dynamic angles. We believe that, for the first class of individuals, it is the biggest characteristic of the rigid demand for residential. For the second class of individual, they purchase house for showing their social status and saluting the problem of children, which will lead to extrusion effect. For the third class of individual, they has more than two sets of housing or only for the purpose of investment holding, housing prices will increase its wealth and promoting consumption, which leads to the wealth effect, but because the marginal consumption trend decline, wealth effect will be more and more small, then from the real estate wealth redistribution function, positional consumption and bequest motives were explained in terms of prices on consumption effect of pour U hypothesis.The fourth chapter is the empirical part. This chapter uses the sample which introduced in the third chapter to constructing one-dimensional dynamic semi parametric model. From the perspective of evidence, it verifies the prices rise to the resident consumption overall pour U hypothesis. The empirical results show that:in the house of no more than about5680yuan range, wealth effect is bigger than the extrusion effect. Housing prices have simulative effect. Once prices beyond this range, the wealth effect will be smaller than the extrusion effect. Then, prices continuing to rise will inhibit consumption. In the process the price rising, the change between the wealth effect and the extrusion effect will lead price on consumption of the overall effect to appearing first after negative trend. Accordingly, macroscopically empirical data analysis has confirmed the price rise of residents’consumption overall effect "pour U hypothesis.The fifth chapter is the conclusion part. This chapter firstly summarizes the conclusion of the study in the first four chapters. The conclusion of this paper is that prices rising impacting on Residents’consumption is firstly promoting and then inhibiting. The empirical results show that prices at approximately equal to 5680yuan is a watershed. Below this price, prices rising to dweller have simulative effect. Beyond this critical point, house prices will restrain dweller consumption. This well verified."Pour U hypothesis. Secondly the research process still has some shortcomings. I hope more scholars make up this paper.The novelty of this paper has two aspects:Firstly, Author breaks through the traditional research idea that house prices has a single-direction effect on overall consumption of residents and proposes that the influence render a following rejection after promotion with sustained rise of estate price. Secondly, Author applies semiparametric theory to study the effect on overall consumption of residents with house price rising in the empirical part. That is, using the derivative of unknown function to describe the dynamic change of the total effect. The result confirms the pour U hypothesis adequately.