A Study On Moral Hazard Of Farmers’increasing Life Consumption In Excess After Loan

The policy of targeted poverty alleviation has been carried out in China for many years and has achieved remarkable results.However,with the further development of poverty alleviation work,the remaining poverty is more stubborn,and the problem of low efficiency and risk of previous financial poverty alleviation gradually appear.One of the key problems is that a lot of borrowing has not been used for production,which has led to some inappropriate non-target consumption by farmers.This not only wastes financial resources,but also increases the risk of default,however,at present,this kind of problem has not aroused enough attention.This article mainly studies the excessive consumption behavior after borrowing,peering on the moral risk of the borrowers in the financial poverty alleviation.This kind of consumption reflects the irrationality of peasant households.It is difficult for traditional economics to explain the "irrational" behavior of peasant households.Therefore,behavioral economics,a relatively new interdisciplinary subject,viewing cognitive bias and punishment threat as the main influencing factors,dividing the consumption account of peasant households after loans into psychological income account and psychological repayment account,integrating classical consumption theory and Prospect theory,and exploring the behavioral determinants of peasant households’ consumption after loans was introduced into this paper.In order to distinguish the "degree" of consumption,this paper adopts the method of quasi-experimental study,setting the farmers who get loans as the experimental group,the farmers who do not as the control group,regarding the difference between the two corresponding living consumption as the measure of excessive increase of consumption after the loan and solves the mathematical expression of excessive consumption in this part.Then the factors affecting the parameters of the theoretical model and the fluctuation of consumption after repayment are further analyzed,forming an analytical framework to study the excessive increase of household consumption after loans.In order to verify the fit degree between theoretical analysis and reality,this paper uses PSM-DID method to carry out empirical research,in which layered consumption were selected as the dependent variables to avoid the direct impact of consumer credit on farmers ’ consumption and to analyze differences among different levels of consumption differences.The explain variables were the dumb variable of obtaining a loan,and the control variables including income,which are related to borrowing and promote reasonable consumption,aiming at explore the direct impact of loans to farmers ’ consumption.This part first carries on the regression analysis according to the main points in the theoretical framework,and then uses the empirical results to measure the psychological account coefficient in the theoretical model.The main conclusions of the study are as follows:(1)Generally speaking,the moral hazard of excessive increase of household consumption after loans exists,and the situation of formal loans is even worse than that of informal loans.(2)When the risk of repayment is high,the effect of loan on the excessive increase of subsistence consumption is more obvious.At this time,the behavior of farmers in dual financial channels is similar in numerical value,which conforms to the prospect theory.(3)The analysis of hierarchy of consumption shows that famers after credit regard meeting survival consumption as a priority and the enjoyment consumption may be suppressed,which shows that the consumption of farmers after loan is affected by the consumption hierarchy obviously,indicating the credit consciousness of farmers is unsound with structural characteristics.(4)the consumption of the borrowers after repayment is less than the control group,which shows that the farmers’ excessive adjustment to the loss of the mental income account,reflecting that the consumption of the farmers before and after the loan repayment is unsmooth.Finally,based on the above conclusions,the paper puts forward some pertinent suggestions.