An Empirical Study On The Impact Of Life Insurance On Residents' Consumption

In the past 40 years of Reform and Opening Up,China's economy has achieved qualitative achievements.However,at present,China is in a transitional period and faces many difficulties,one of them is promotion fee and expand domestic demand.The key to promoting resident consumption is to reduce residents' fears about future risks and thus reduce the precautionary savings of residents.Life insurance,an effective means to prevent risks,can protect the long-term and stable consumption expenditures of personal and household,and lay a solid foundation for consumers to formulate long-term consumption plans.Firstly,this article uses the annual data of the Pearl River Delta consumer expenditure,life insurance premium income,financial institutions savings deposits and regional GDP from 1995 to 2016,and combines the vector error correction model to empirically study on the impact of life insurance in Pearl River Delta on Residents' Consumption from the Perspective of Time Series Analysis.The result shows that the development of life insurance in the Pearl River Delta has a significant role in promoting consumer spending in the long time,and the coefficient is 0.165209,while in the short term it is dominated by inhibition,and the coefficient is-0.098346,and the long-term promotion effect is greater than short-term.Then,this paper constructs a basic model of the relationship between life insurance development and residents' consumption through the revised Solow Model and Overlapping Generation Model(OLG model).The model show that the development of life insurance has a direct impact on residents' consumption;then I use panel data of the Pearl River Delta cities in 1995-2016 to analyze the impact of life insurance on household consumption.The results show that the development of life insurance in the Pearl River Delta has a significant impact on household consumption,and the coefficient is 0.5648,while it is insignificant for the impact of property insurance development on household consumption,and the coefficient is 0.0048,and the impact of life insurance on household consumption is greater than that property insurance's.Finally,according to the empirical results of the time series analysis and panel data analysis,I propose some suggestions for expand the life insurance consumption and increase the coverage of life insurance: increasing the promotion of life insurance and the supervision level,and training and introducing insurance high-quality labor.