Research On The Impact Of Housing Prices Changes On Consumption Of Zhejiang Province

In recent years the real estate market development rapidly, and it has become a new point of consumer and investment.The real estate plays an extremely important role on expanding the domestic demand and stimulating economic growth.Residents consumption rate dropped from 47.6% in 1999 to 36.2% in 2013.Expanding domestic demand especially improving the level of residents’ consumption has become a major measure for the adjustment of economic structure. So researched on the connection between real estate price and the resident’s consumption level has the reality significance.The current domestic existing research focuses on housing prices on the impact on the overall consumption of residents in our country.Less concerned about a particular segment of different income groups in the area of research.As the starting point of choice and innovation point in this paper.Take zhejiang province as an example, combining theory and empirical,research the influence of real estate price changes in a specific research area to overall consumption of local residents.Then further explore the real estate price changes on the different influence of different income groups consumption. Theoretical part, reviews the development of the consumption function theory, and the transmission mechanism of house price changesimpact on residents’ consumption. Start from the angle of economics related,respectively from the two aspects of dynamic and static elaboration of prices change different effects on the micro individual consumption. The empirical part, based on time series model, through VAR model, cointegration test and compose analysis,research the effect of real estate price changes to t overall consumption.To subdivide the effect difference in different income groups, further selecting of zhejiang province during 1999-2013 annual data, through building panel data model, research the different effects on different income groups.The research shows that disposable income is still the decisive factor affecting consumer spending across income groups.On the whole, the consumer’s income elasticity was 0.76.From the point of different income groups, different income groups consumption income elasticity coefficients above 0.6.With the increase of disposable income,the income elasticity of consumption first increases then decreases.Compared to other income groups, upper-middle-income group has the highest income elasticity coefficient of 0.830076.The results of time series mode shows that prices rise and the overall consumption of residents in zhejiang province presents a weak negative correlation and significant both both long-term and short-term.From the point of different income groups, there are different effects on each income group. Housing prices have a weak extrusion effect on medium and the following incom groups. the low-income group slightly obviously than the other two groups. Housing priceson consumption elasticity coefficient is 0.084868. And upper-high,high-income groups have a positive wealth effect,but the high income groups was not significant. Finally, combining with the conclusion and the actual situation, put forward relevant suggestions to alleviate crowding out and improve residents’ consumption.