Research On Precautionary Savings Behavior Of Chinese Urban Households

The supernormal growth of Residents savings has been a prominent problem in China. Since the1990s, Household savings has been rising and reach at a high level now, and has crossed the40trillion at the end of2013. The high level of household savings is bound to restrict the expenditure of household and Household Consumption Rate is low for many years in China, which results in a chronically weak demand of consumption and restricts the development of the economy. Therefore, we must reduce household savings timely. In order to reduce household savings, we must understand the motive of household savings, and precautionary savings may provide a research perspective, which says the purpose of savings is to prevent the uncertainty of future. Due to our country is in a transition from a planned economy to a market economy, with the market-oriented reform of the income distribution system, housing system, medical system, education system and pension system, the uncertainties in economics increase significantly, the residents may save more to cope with these uncertainties. Therefore, the precautionary savings theory is feasible to research the phenomenon of high savings in China.This paper estimates the strength of precautionary savings motive of Chinese urban households, and analyzes the reasons why Chinese urban households have a strong precautionary savings motive. In the aspect of empirical research, this paper selects Panel Data of29provinces (city) from1992to2013to estimate the strength of precautionary savings motive of Chinese urban households from three aspects by econometrics method. Firstly, this paper estimates the strength of precautionary savings motive of urban residents from the overall, and the result shows that the relatively prudent coefficient of urban households reaches12.58, indicating that the strength of precautionary savings motive of Chinese urban households is very strong. Secondly, this paper estimates the strength of precautionary savings motive of urban households in eastern area, middle area and western area, and the results show that the relatively prudent coefficient of urban households in the three areas are13.04,10.86and14.08, indicating that the strength of precautionary savings motive of urban households in the three areas are all very strong. Finally, this paper examines the temporal variation of the strength of precautionary savings motive of urban households, and the result shows that the trend of the relatively prudent coefficient of urban households is decrease-smooth-upward, but from the specific numerical point of view, the strength of precautionary savings motive of urban households in each period of storage are all very strong. According to the results of empirical analysis, this paper takes the Western precautionary savings theory as the foundation, unifying the realistic conditions of transition stage of our country, and analyzes the reasons why Chinese urban households have a strong precautionary saving motive, including the uncertainty of future income and future expenditure and the potential liquidity constraint. In the end, in order to ease the motive of precautionary savings of Chinese urban households, this paper puts forward some effective suggestion on the basis of theoretical and empirical research.