The Impact Of Household Assets And Liabilities On Consumption Of Urban And Rural Residents

In the past,domestic consumer demand has been an important driver of China’s economic growth.In the new normal of economy,the sluggish growth of investment and the impact on foreign trade make it necessary to rely on the promotion of consumption.Consumption will play an increasingly important role in the process of economic restructuring.With the sustainable growth of household wealth,household assets and liabilities have become an important factor that can affect household consumption.Therefore,it is of practical significance to study the impact of household assets and liabilities on consumption between urban and rural households to understand the urban-rural differences and consumption status quo.Life-cycle theory and permanent income hypothesis are the theoretical foundation of the impact of household assets and liabilities on household consumption.On the basis of existing theories and empirical research results,this article use from 2012 to 2016,three Chinese households micro panel data,set up the econometric model which take household consumption as explained variable,household assets and liabilities level as the main explanatory variables.After controlling for family characteristics and regional characteristics,the article examines the effects of household assets and liabilities on household consumption and the structure,and innovatively focuses on the comparison of differences between towns and villages.The research focuses on the differences between towns and villages.In addition to the baseline regression,the heterogeneity of household asset structure is further examined.It is found that the changes in the value of various types of assets and liabilities are likely to have a significant impact on household consumption,which may change due to differences in urban and rural areas,household housing asset heterogeneity and household characteristics.Furthermore,this paper also finds that household liabilities have an inhibitory effect on the wealth effect of household assets.In the robustness test,the empirical research results are tested by changing variables,samples and coefficient estimation methods.The test proves that the empirical analysis results obtained in this paper are robust.Among the conclusions,the conclusions of this paper provide positive enlightenment for China’s real estate market and household asset allocation.