Estimation Of Elasticity Of Intertemporal Substitution Of Urban And Rural Residents In China Based On Multiple Model

Since 2008,the world's economy has thus experienced a serious decline due to the serious impact of the U.S.economic crisis.In particular,China's net exports decline due to the serious impact of foreign demand.Following the historical experience of developed market economies,we can conclude that consumer demand should be dominant in promoting sustained and stable economic growth.At present,although consumer demand has played an important role in promoting China's economic growth,China's domestic demand is still insufficient,and consumer demand is not effectively satisfied.And this is also the purpose ofsupply-side structural reform,for domestic consumers to provide effective supply,so as to further tap the potential of China's domestic demand.According to the law of consumer consumption,the progressive development of economic level will gradually increase consumer income,which makes the family to meet the current necessities of consumption and put the surplus as investment or savings for consumption in the next period.Therefore,the family will make the choice during the current period and the future to consume,and elasticity of intertemporal substitution is an important factor affecting the family to make such trade-offs.This paper chooses the Ramsay model,the uncertain life cycle model and the Consumption Capital Asset Pricing Model as the main model to estimate the parameters.Based on the macroscopic time data and the microscopic panel data,we use the least squares method,two stage least squares method and other econometric methods to estimate and analyze the elasticity of intertemporal substitutionof urban and rural residents.The elasticity of intertemporal substitution of rural residents and urban residents in China is 1.487 and 1.025 respectively.Based on the consumption capital model,the consumption elasticity of rural residents and urban residents is 7.011,3.875;and when estimated on the uncertainty of the life cycle model using panel data,owing to the availability of data,the estimate is not ideal,it is estimated that the rural residents consumption of intertemporal alternative elasticity value of-8.988,not With real economic significance,urban residents 1.22,but did not pass a significant test.It can be found from the results that although the model is different,the estimation result of the Ramsay Model is consistent with the estimation result of the Consumption Capital Asset Pricing Model:(1)Whether rural residents or urban residents,the values of elasticity of intertemporal substitution are greater than 1.This shows that consumers are more sensitive to the changes in interest rates.If the interest rate increases,consumers will consume less in current and consume more in the future and increase the total utility.(2)The elasticity of intertemporal substitution of rural residents slightly larger than urban residents.It shows that urban residents pay more attention to current consumption,while rural residents pay more attention to future consumption.