Quantitative Analysis On Urban And Rural Residents’Consumption Behavior And Characteristics In China From The Micro Perspective

Since the reform and opening up, the economic growth mode of China has always been driven by investment and exports, while consumption has been in a non-dominant position. Statistics show that since the year of1978the average residents’consumption rate of China was45.5percent.From1952to2010, the residents’consumption rate had dropped from65.4percent to33.8percent. It was not only lower than the average of industrialized countries, but also lower than most of other developing countries. In contrast, the dependence on foreign trade and investment rate was much higher than the world average."High growth, high investment, high dependence on export, high savings and low consumption" had become a typical portrayal of Chinese macro economy. In recent years, the consumer market has been downturn, production and investment has been inefficient, the capacity has been seriously excessive, the banking sectors’non-performing assets have been risen, the energy consumption has been excessive,resources and the environment have been seriously damaged.All of the above bears the risk of structural inflation. Once the capacity accumulates to a certain extent, it will cause deflation and trigger a new round of transform between inflation and deflation.This will cause economic fluctuations. But the lack of domestic demand will force our dependence on foreign economies to improve so that our economic growth model will be more reliant on investment and exports and generate a certain degree of path dependence. Therefore, investment and export-led economic growth is not sustainable. Only by improving the consumption rate the quality of our life can improve and we can share the fruits of economic development.Factors which affect consumers’ choice are multifaceted and extremely complex. But in summarize, it consists the consumers’ own internal factors and external environmental factors which are important factors that influence consumer choice behavior. In1992. our country established the socialist market economy in which market was a based instruments of allocating resources. Since then, rapid economic growth, increasing income, housing, health, education, employment, pension, system reforms such as income distribution has been introduced and deepen. These major and fundamental reforms change the external environment of consumer behavior. Changes in the macroeconomic environment and social ideas greatly influenced the economic ideas of consumers, consumer psychology, consumer behavior.This paper uses the theory of consumer behavior (including:Keynes’s absolute income hypothesis, Friedman’s permanent income hypothesis, Modigliani’s life cycle hypothesis) as a guide and use CHARLS micro-survey data, and establish quantile regression model based on the total sample in the urban, a sample under the age of60in the urban, a sample over the age of60in the urban, the total sample in the rural, a sample under the age of60in the rural and a sample over the age of60in the rural. In the while, the paper introduce dummy variables to study whose asymmetric impact on consumer spending. This article also establishes quantile regression model to study which factors influence food expenditure, clothing expenditure, transportation and communication costs and household goods expenditure based on the total sample in the urban. This paper is structured as follows:The first part is an introduction, which shows the writing background, meaning and innovation; The second part describes the theory of consumer behavior; The third part is quantile regression models and variables processing; The fourth part is the establishment of urban sample quantile regression model and also gives economic significance analysis based on empirical results; The fifth part is the establishment of rural sample quantile regression model and also gives economic significance analysis based on empirical results; The sixth part is conclusions and policy recommendations related to this article.The conclusion is:consumption expenditure of urban residents is mainly affected by permanent income. Temporary incomes’impact on consumer spending are almost insignificant. As the permanent income of rural residents is instable, temporary income also affect consumer spending of rural residents. Non-financial wealth is an important factor affecting urban residents’ consumption expenditure, which is greater than the financial wealths’ impact on consumption expenditure of urban residents. A larger number of family members, higher education, retirement, social insurance, pension will make permanent income of urban residents significantly asymmetric affect the consumer spending. The impact of the presence or absence of social insurance for the upscale is not significant. For low consumers, small amounts of pension does not make the permanent income significantly increased consumer spending. Almost all of the per capita temporary income doesn’t have a significant impact on urban per capita breakdown of expenditure. For a breakdown of the different spending, its main factors are different. Non-financial wealth such as real estate, land, fixed assets become the main factors affecting rural consumer. Whether rural or urban, compared to residents under the age of70, residents over the age of70whose permanent income have an impact on consumer spending.