Research In Wealth Effect Of Deposits Of Rural Residents In China

Since the reform and open policy, with the rapid development of our country’s economy, the income level of households is increasing. However, economic growth depends heavily on investment and exports, and consumption demand deficiency, has become a bottleneck of the sustained economic development in China. How to further expand the consumption demand, adjust the economic structure and growth mode, seek a new breakthrough has profound significance to our country’s macroeconomic regulation. In the consumption function form, the relationship between asset value and consumer spending, which the wealth effect of assets has become the research focus. But many existing academic research focused on the whole nation or urban areas, while ignoring the vast rural areas, and with housing assets or stock assets as representative variables of the wealth effect and ignoring the main assets of the rural residents in China---he bank savings assets. So the rural residents’ savings assets change on the influence of consumer spending is particularly important. Accordingly, the purpose of this research is to deeply and roundly discuss the existence and the size of the wealth effects of rural residents’ bank savings assets in China.Based on the above argument, this article first reviewed the domestic and foreign research achievements of this field, aiming at the problems existing to establish research plan, clear writing ideas, look for possible ways, and set up a research framework. Then it explains the theoretical origin and development of the wealth effect, combing the formation mechanism and the transmission mechanism of wealth effect, and establishes the test model of household assets wealth effect in China. After that, the article analyses in detail the reality, change characteristics and growth factors of rural residents’ savings assets, and focuses on the strength of the rural residents’ precautionary savings motives.Based on different kinds of data concerning per capita net income, per capita consumption expenditure, per capita bank savings assets of rural residents nationally and regionally, time series model and panel data model have been set up respectively to analyze the overall situation and regional differences of the impacts of rural residents’ bank savings deposits on their wealth. In the time series model, the empirical results show that the per capita net income of rural residents in China is the most important reason to influence the consumption, while wealth effects of bank savings assets appear significantly positive but wealth. The empirical results of panel data model also proved the existence of wealth effects of the bank savings assets in most rural areas, but there are significant differences between provinces. Therefore, in order to facilitate the wealth effects of China’s rural residents’ savings assets work effectively, it needs to speed up the rural residents’ income distribution reform, steadily improve the rural residents’ income level, promote to construct the rural social security system, dredge the rural financial investment channels, strengthen the exchanges and cooperation between provinces. The research puts forward the thoughts of follow-up studies in the end.