The Research On The Impact Of Income And Expenditure Uncertainty Of Shanxi Consumer

As the purpose and destination of production, consumption is the fundamentaldriving force of economic development, but China’s economic development has beenover-reliance on investment for a long time while ignoring consumption, the pattern ofeconomic development has a serious threat to the quality of China’s economy. Since thereform and opening, system innovation which related to the residents’ vital interests,such as pension system, employment system, education system, health care system,housing system reform, has made the uncertainty become a remarkable feature of thisperiod, and has a significant influence to consumer. Shanxi Province, as an economicunderdeveloped province in central China, system innovation makes theShanxi residents faced more uncertainty, which severely restricted the residents’consumption and hindered the development of economy in Shanxi province. Based onthe western consumption theory, this paper will analyse the uncertainty faced by Shanxiresidents in urban and rural areas from the system innovation, income uncertainty andexpenditure uncertainty. And explore consumption characteristics and its effect onconsumption of Shanxi residents under uncertainty environment. This can greatly enrichconsumer economics theory, provide policy recommendations for the government andexpand consumer demand, has great theoretical and practical value.In the paper, the urban and rural residents income uncertainty is represented bystandard deviation of urban residents disposable income with income level grouping andstandard deviation of net income of rural residents in different income level groups,education expenditure uncertainty, living expenditure uncertainty and healthcare uncertainty is respectively represented by cost price index, the rental prices index,and medical care price index, and use these indicators to react the income uncertaintyfactors and the impact on the residents’ consumption comprehensively. The paper adoptstheoretical analysis and empirical analysis to analyze the influence of uncertainty toShanxi residents’ consumption from the viewpoints of both qualitative andquantitative. First, this paper analyses the background, significance, research status athome and abroad to seek innovative points and research direction of the article. Second,this paper reviews the consumption theory, which laies the theoretical foundation for theresearch. Third, combining with the actual situation of Shanxi, this paper adopts qualitative method to analyse the uncertainty factors and their impact on Shanxiresidents’ consumption. Then, with the data from1978to2013in Shanxi Province, thepaper will build Shanxi urban and rural residents’ consumption model containsuncertainty to reflect the relationship of system innovation, income uncertainty,expenditure uncertainty and residents’ consumption. Finally, according to the results, thepaper draws the conclusion and put forward specific policy recommendations.The research shows that: The income is still the most important factor. Urban andrural residents in Shanxi take precautionary savings behavior to answer the incomeuncertainty. Expenditure uncertainty has different effect on urban and rural residents:Before the reform of higher education, facing the education expenditure uncertaintyurban residents take precautionary savings behavior, and rural residents have to increaseits current consumer spending because of the undelay and rising price of education;After higher education reform, education expenditure uncertainty increases the currentconsumption of urban residents in Shanxi. Before medical system reform, urbanresidents in Shanxi have no precautionary savings motive due to the free medical carefor protection; After medical system reform, urban residents have to increase its currenthealth care expenses because of the undelay and rising price of health care expenditure,health care uncertainty strengthen the urban residents’ preventive savings motivation.Facing the medical care expenditure uncertainty and medical system reform, ruralresidents exhibit the opposite behavior of urban residents in Shanxi. In the face of livingexpenditure uncertainty, both urban and rural residents in Shanxi show strongprecautionary savings motive. Perfecting the social security system is helpful to reducethe uncertainty that Shanxi residents faced, and promote Shanxi residents’ consumption.