A Study On The Impact Of Income And Consumer Credit On Consumer Expenditure

Consumer spending is sensitive to income and consumer credit.The excessive sensitivity of consumption to income was proposed by Campbell and Mankiw in 1989.From a mathematical point of view,the index is actually a marginal propensity to consume.In terms of content,the index also refers to the proportion of liquidity-constrained consumers.The sensitivity of consumption to consumer credit reflects the sensitivity of consumption to changes in consumer credit.The two sensitivities are heterogeneous in the development of different income and consumer credit markets.Based on the mismatch between income,consumer credit and consumption,this paper studies the impact of income and consumer credit on consumption in China.According to theoretical research,two hypotheses of consumer behavior heterogeneity are proposed:(1)The proportion of liquidity-sensitive consumers decreases with the increase of income and the improvement of the consumer credit market;(2)The sensitivity of consumption to current consumer credit and intertemporal consumer credit decreases with the increase of income and the improvement of consumer credit market.In order to verify the hypotheses,this paper based on the inter-provincial panel data of China's income,consumer credit and consumer expenditure in 2004-2017,respectively,establishes the panel smooth transition model with urban per capita disposable income and consumption credit development as transition variables.The regression results show that:(1)The proportion of liquidity-constrained consumers,who is under the disadvantaged environment,is usually 2.5 times that of the dominant environment;(2)The spending of consumers with higher income and better consumer credit environment is more sensitive to current consumer credit;(3)It is expected that there will be no significant intertemporal effect on the consumption of short-term consumer credit lines.According to the research conclusions,two policy recommendations are proposed:(1)More attention should be paid to improving the consumer credit environment in low-income and central and western regions.(2)Further consumer financial innovation to promote consumption by high-income groups..