Application Of Cluster Analysis And Principal Component Analysis In Consumption Data

Consumption is important to livelihood of people. The improvement of consumption level will improve the living standard of people. Similarly the study of rural consumption in Shandong will improve the living standards of rural residents in Shandong.The indications in this paper include the food, clothing, household,communication, appliances, medical, traffic, entertainment and educational in the matter of the average expenditure in Shandong. The mathematical method we use is cluster analysis and principal component analysis and so on. Through different indications, combining the theory of consumption, the author gives the suggestions to improve the life of rural residents. We respectively put forward different proposals to the different levels of consumption area. Specific measures are to strengthen the government’s macroeconomic regulation and control, to strengthen infrastructure construction, to improve the income of residents, and so on.The analysis concerning the background of Shandong province rural residents’ consumption research is in the first part, and we put forward the importance of the consumption of rural residents to Chinese economic development. The second part is the summary of consumption theory divided to foreign consumption theory and domestic consumption theory.The third part and the fourth part respectively from the concept, basic idea as well as mathematical model, we know the theory about cluster analysis and principal component analysis. These parts introduce the advantages of cluster analysis and principal component analysis for statistical analysis. The fifth part is to introduce the R language software. R language is a kind of open statistical language software. The results of the data in this paper are obtained from the results of the R language.The sixth part is using basic statistical analysis, cluster analysis, principal component analysis dissects the consumption in different rural in Shandong province.Sorting the scores by cluster analysis and principal component analysis, we see the different consumption levels in Shandong, and we also analyze the effect of various cities of the rural residents’ consumption level difference in geographical factors,historical and cultural, and so on. The seventh part gives some suggestions about improving the consumption structure of rural residents in Shandong province. We respectively put forward different proposals to the different levels of consumptionarea that we should highlight the leading role in the economic developed cities consumption level of rural residents, develop the moderate consumption level areas of rural residents consumption growth potential and lay the foundation of low income rural residents consumption.