The Effect Of Housing Prices On The Consumption Of Residents From Different Income Groups

Consumption,investment and exports are regard as engines that promote the growth of a country's economy.However,under the background of the globalization,the influence of international politics and economy on our country has been more and more profound.China's exports have been hindered as well as the traditional mode of stimulating economic development with investment is also being reproached.Therefore,the role and status of consumption have become increasingly prominent.In the classical western consumption theory,composition of household income and wealth as the main factor influencing consumption.In such a long history,Chinese real estate market has been experiencing a period of booming development.This makes larger proportion of real estate assets that make up the wealth in the household of our country.The theoretical circle has not reached a consensus that whether the rise of real estate prices may promote the consumption of residents.Therefore,under the background of the new era,it is worthy to study how to keep the real estate prices steady,building a sustained and steady real estate market,as well as to increase the consumption of residents,promoting the economic growth of a country.The real estate market has a strong regional characteristics.Due to the uneven development of regional economy in China,the development of the real estate market across the provinces is different,causing the huge differences in housing prices between provinces.In addition,there is a serious imbalance in the income level of our residents nowadays,the distinction of income among residents indifferent income levels in the same province is relatively large.Therefore,in this article,we will focus on the empirical research at the provincial level,and select Guangdong Province as a case to explore the impact of housing prices on the consumption of residents of different income classes in Guangdong Province,aiming to generate meaningful theoretical and practical contributions.After a brief review of domestic and foreign literature and a description of the housing market and consumer spending in Guangdong Province,we select Guangdong Provincial Bureau of Statistics Yearbook 2000-2016 which are based on the availability of data and the principle of timeliness to build a model for empirical analysis in this paper.On the first step,ADF unit root test,Johansen co-integration test and Granger causality test were used to analyze the overall time series,which are to explore the impact of housing prices on the overall consumption;on the second step,we use ADF unit root test,Johansen co-integration test and Granger causality test to perform time-series regression analysis of different income groups to explore the impact of housing prices on household consumption of different income groups.We can found that:the rise in house prices promotes the overall consumption of residents in Guangdong Province;among them,the consumption impact of low-income and high-income people is not significant;there is a restraining effect on the consumption of low-income residents;residents consumption on middle-income and upper-income groups has had different levels of promotion.Based on the results of this study,this paper presents policy recommendations.