An Empirical Study On The Direct Wealth Effect Of The Stock Market

First of all, this paper describes the research background and research status. China’s stock market while the fluctuation is very big, but in the overall scale has been in a stage of rapid development, especially since the reform started in 2005, after experiencing a wave of market in 2007, China’s stock market entered a phase of rapid development, compared to 2005 before significantly accelerated, and the current research more is based on data before 2010. The conclusion of the study that China’s stock market wealth effect significantly, but the influence degree is low. It is based on this background and research status, this paper selects the monthly data of 2009-2015 as the sample data. Secondly, this article in the theoretical analysis part, the author describes the Keynesian absolute income hypothesis, Duesenberry’s relative income hypothesis, Modigliani’s life cycle hypothesis, Friedman’s permanent income hypothesis and behavioral finance theory, and Modigliani’s life cycle hypothesis as the theoretical foundation to construct the empirical model. Finally, this paper utilizes the 2009-2015 years of monthly data, the seasonal adjustment, unit root test, the cointegration test and vector autoregressive model, vector error correction model and impulse response test and Granger causality test and other measurement methods, analyzes the stock market wealth effect in China. Empirical results show that in our country exists significant wealth effect, different from the research results of other scholars, this paper found that the wealth effect of stock market of our country not only significantly, and its influence is higher, the stock market the marginal propensity to consume is higher. Which China Shanghai Composite Index 10% per change, the total retail sales of social consumer goods will change 3.7%, the corresponding, the total market value per capita of 10% of the total market value, the total retail sales of social consumer goods will change 3.1%. Although there are some differences in the marginal propensity to consume, both of them show that the marginal propensity to consume of the stock market in our country is at a high level. This paper argues that this with the current scale of China’s stock market both absolute index and relative index are in on a higher level, namely, with the continuous development of China’s stock market, the wealth effect of stock market of our country will significantly improve the. In addition, the paper also found that the impact of the stock market for different categories of consumer goods is different, mainly for the impact of different levels, different direction. At the end of this paper, the future research on the stock market wealth effect of the stock market is discussed.