Changes In Population Age Structure And Resident's Consumption In China:Theory And Evidence

China has entered the medium-term period of economic transformation, with the continuous development of market, urbanization, science and technology, China's economy gained rapid development. However, along with rapid economic growth, China's consumption rate has shown a long-term downward trend. The low consumption rate leads to lack of effective domestic consumer demand, it may affect the steady and continuous development of China's economy. From the perspective of the population age structure, this paper studied the relationship between the changes in population age structure and the resident's consumption rate from the theoretical and empirical point of view, Referencing the indicator population age structure of consumer economics theory, established a consumption function model that include the variable population age structure, then made an empirical test of the model using China's macro-panel data and time series data about the explanatory variables such as population age structure.Traditionally, people used to use the changes in income to explain consumer behavior, such as Keynes's absolute income model and Friedman's permanent income model, but these models have ignored the impact of population age structure on consumer, which is an important population structure factor. Then what's the relationship between population age structure and consumption rate? Is China's high growth rate caused directly or indirectly by population age structure changes after the 1980s? What kind of role the population age structure changes is playing in the resident's consumption? Research on these issues has a positive practical significance and an important theoretical value to realize China's economic growth pattern from investment-driven and export-driven to consumer-driven, maintain healthy and stable development of China's economy and help formulate China's economic policy and population policy.From the perspective of population age structure to research China's consumption rate will help us to analysis the impact of population aging on China's future economic performance from a macro point of view. By combined effect of the impact to micro-household consumption, population aging affects the whole society's consumption and savings at the macro level, and further has an impact to the operation of the entire national economic.With the growing of China's aging population and the rapid increase in China's elderly population, it will inevitably affect the amount of China's total savings and total consumption, thereby affect the development of China's macro-economic situation. Therefore, this study can serve as a reference to develop the future population policies and economic policies, to better analyze the relationship between economic growth, population changes and consumption or savings, to grasp their inner law of development, it has a strong practical significance to maintain China's sustainable economic development.First, this paper reviewed the related study about domestic and foreign consumption function, and the theory literature and empirical literature on the relationship between population age structure and consumption, compared the similarities and differences in various hypotheses of consumer behavior and the consumption function, from which getting the theoretical and technical support for the follow-up study; Second, the author summarized the historical evolution process, causes and characteristics of China's population age structure transformation since the founding of New China, and cited the challenges of aging population that we are facing. From two dimensions of vertical historical comparison and horizontal international contrast, the research mainly used related charts and data to describe and explain the resident's present situation on their consumption rate, and concluded that China's consumption rate was low; Then, this dissertation analyzed the factors that affected consumption rate from two perspectives of the proportion of income and consumer tendency, obtained that changes in population age structure was one of the factors affecting resident's consumption. Next, the author focused on analyzing the mechanism and the specific ways the population age structure changes influenced the consumer, and discoursed the domestic and foreign empirical studies about the population age structure and the consumer behavior; Then the paper made an empirical study on the relationship between population age structure changes and resident's consumption rate, it included the assumptions about consumer behavior and the construction of China's consumption function model that the variable population age structure was included in. The author used China's provincial panel data during 2000-2009 to test the consumption function model at the national level and the sub-regional level, the empirical results found that the demographic structure factors had significant impacts on consumption rate. The consumption rate was positively correlated with the youth dependency rate, but negatively correlated with the old dependency rate. However, the relationship between consumption rate and dependency rate in east, middle and west areas did'nt keep pace with the whole country. The differences reflected the economic and social development gap between regions and the differences among the degree of aging in different areas. Taking into account the variables population age structure does' nt have sufficient dispersion until in a long time, this article also used cointegration theory to make an empirical test of China's 1978-2009 macro-economic time series data. The empirical results showed that there wss a cointegration relationship between population age structure and consumption rate, revealing the long-run equilibrium relationship between population age structure and consumption rate. Granger causality test showed that there was a one-way granger causality between dependency ratio and consumption rate.basing on this, the author examined the impacts of the children dependency ratio and the old age dependency ratio on China's consumption rate, found that the impact of old age dependency ratio on China's consumption rate was greater. Finally, according to the empirical research results, the paper conducted a comprehensive summary about the impact of changes in population age structure on China's consumer, made some appropriate policy suggestions, and also described the problems and further research fields.