Liquidity Constraint And China Household Consumption

Residents’consumption level has long been the focus of attention, especially in those years, for the current international economic situation is uncertain, and the development of the domestic economy is also in a critical transition environment. Thus in order to make level of consumption for domestic residents as the backbone for the economy, the improvement the residents’consumption level becomes the focus of economists’ research.Therefore, this article sets liquidity constraints as the starting point, adding part of the family demographic indicators to analysis china households’ consumption. On the one hand, reading the development consumer theory in the literature on the basis of classical framework, build indicators reflect household liquidity constraints; on the other hand, By introducing the China household financial survey data with Stata、Excel and other system software, we do empirical analysis of liquidity constraints on household consumption.The first part is the preamble. This part do a brief description of the background, the purpose of writing of this article, its significance; and followed by the description of the structure arrangements, then explained the choice of the research method and innovations.The second part sorts out a comprehensive system of the theory of consumer and relative researches. First is introduce of the three basic theories expounded on consumer spending, which are the theory of absolute income hypothesis, permanent income hypothesis theory, and life cycle theory. Thus describes the development and extension of the theory of consumption, mainly through the following phases around the "certainty equivalent model ", around "the transition sensitivity hypothesis" analysis, then the short-sighted consumer modeling, and extending to the study to inter-temporal consumption. By the following introduction of the "uncertainty" factors explore, we describe liquidity constraint and the relative researches on liquidity constraint. The third part is on the basis discussion of the thorough consumer theory elaborated; this article explores the architecture of the proposed model and its choice of variables. We do introduction of the basic model for the life cycle-lasting income under the assumption of classical equations on consumer income and explain the classic equations exist many defects in real life. Then we do Simple deformation model, to build consumer model in this paper is to explore the liquidity constraints.The fourth part is to introduce of the CHFS data on empirical analysis, and the result is the liquidity constraints on household consumption was significantly negatively correlated. In addition, the model analysis found that other variables such as family income on consumption significantly positive correlation; head of household education on consumption significantly positive correlation; compared to urban households and rural households on consumption significantly negatively correlated.The fifth part is talking about the main conclusions and policy recommendations. In conclusion:(1) liquidity constraints as an abstract concept, although difficult Quantification is difficult, but through the design of the appropriate index system and the use of scientific measurement method, the actual measurement.(2) both from macro-theory analysis and the samples to build the model analysis of microscopic family, we can come to a liquidity constraints on household consumption, the presence of a significant negative correlation, and therefore alleviate the liquidity constraint of the family in order to promote social consumption is an effective way. Therefore, based on the analysis of the results of the model, the paper proposes the following policy recommendations:(1) to deepen the reform of the national income distribution, and effectively improve the residents’ disposable income, increasing the level of consumption of the residents;(2) to accelerate the development of the domestic financial market, improve the financial the role of the market for credit;(3) deepen the reform of the education system, increase education efforts to put, to improve the level of education of the residents, and fundamentally promote the growth of consumption;(4) to speed up the reform and integration of urban and rural structure, develop and improve the rural consumer market.