The Impact Of Household Debt And Its Structure On The Consumption Of Urban Residents

With the rapid development of the market economy,the culture and concept of consumption have undergone tremendous changes.The concept of advanced consumption led by the young has gradually gained recognition and acceptance from the public.From “fear of debt” to “high debt”,the financial risks faced by households continue to accumulate.In recent years,in order to prevent debt risk from becoming a “grey rhinoceros” that triggers financial risks,the government is also committed to de-leveraging from the supply side.And with the rising housing prices in urban areas,many families have to bear huge housing liabilities and face greater financial pressure,which is not conducive to China's pursuit of high-quality development goals.Furthermore,trade protectionism has prevailed in recent years.How to shift from relying on foreign trade to promote economic growth to stimulating domestic demand to promote economic growth is the focus and difficulty of China's economic reform task.In summary,the current high debt problem of Chinese households has caused the household consumption to become increasingly concerned.Insufficient household consumption is not only hard to meet the requirements of high-quality economic development,but also difficult to adapt to the international economic environment where international trade conflicts frequently occur.Therefore,exploring the impact of household debt and its structure on urban household consumption will help to further expand the research on the impact of household debt,and provide effective suggestions for how to effectively formulate consumption plans for urban households.The government's formulation and implementation of relevant macro-and micro-economic policies for stable growth is of reference significance.According to LC-PIH theory,when the rational consumers make decisions on consumption,the main factor to consider is the total income in their life cycle.Households use borrowing to ease current income restrictions,achieve inter-period allocation of resources,and maximize their effectiveness.However,because this theory differs from the reality,the actual consumption of residents is often lower than its optimal consumption level,and many scholars question its rationality.In order to better explain the real economic phenomenon,scholars began to explore from the aspects of credit constraints and income uncertainty,among which credit constraints have become the mainstream view of most scholars to explain this problem.From the results,borrowing has a significant positive impact on household consumption of urban households,because households have smoothed consumption through borrowing.The larger the size of the previous debt of the family,the more the current level of consumer spending will significantly be reduced.A certain degree of debt leverage is conducive to promoting the consumption of urban households.However,in the case of fixed household debts,the greater the household debt leverage,the more the current consumption will be suppressed.Housing liabilities in household debt have a significant negative impact on household consumption.The higher the housing debt ratio,the stronger the consumer crowding out effect.This article divides household consumption into three categories according to different consumption contents: survival consumption,enjoyment consumption and residential consumption.The results of classification regression show that the scale of household debt in the previous period has a significant inhibitory effect on the current development of enjoyment and residential consumption,but has no significant impact on survival consumption.Among them,housing liabilities have a significant crowding out effect on residential consumption,and non-housing liabilities have a significant inhibitory effect on development and enjoyment consumption.From the heterogeneity of the family,the balance of the previous period of the households subject to liquidity has a significant inhibitory effect on the current consumption expenditure;the balance of the previous period of the debt without the financial knowledge family has a significant inhibitory effect on the current consumption expenditure;The balance of liabilities of the previous period of income households and middle-income families has a significant inhibitory effect on current consumption expenditures.Therefore,this paper proposes the following suggestions: First,because borrowing can smooth household consumption expenditures and excessive debt scales will overwhelm the impact of household consumption,The government should relax some unnecessary controls on consumer credit and establish a sound financial market system.At the same time,it is necessary to focus on preventing systemic financial risks and create a favorable policy environment for the development of consumer finance.Relevant departments should also actively popularize relevant financial knowledge,and promote ordinary households to have more channels to know and rationally use consumer credit,and participate extensively and deeply in consumer finance.The second is to continue to deepen the reform of the real estate market and adhere to the basic concept of “the house is used to live is not used for speculation” to promote the healthy and orderly development of the real estate market.Stabilizing housing prices within a reasonable range,thereby optimizing the household debt structure,guiding households to use debt leverage reasonably,and preventing households from shrinking due to becoming a “house slave” and shrinking consumer spending.Third,the classical consumption theory and the empirical research results of this paper confirm the important role of income for households to increase consumption,which means that it is effective by formulating relevant tax reform policies and increasing transfer payments.It is very practical to increase the disposable income of residents and reduce the distribution of income.It can stimulate residents to increase consumption expenditures.It should be implemented in depth and continue to explore the improvement of relevant policies.