Study On Medical Expenditure Expectation,Buffer Stock And Consumption Behavior Of Urban Residents In China

Over the past 30 years of reform and opening up,China's economy has maintained a high average growth rate,making it the second largest economy in the world.With the increase of the national economy,the human resources,natural resources,institutional arrangements and economic policies that support economic development are making a profound change.Since 2012,the external impact of the global financial crnsis caused by the sub-prime crisis in the United States,and the internal changes in the input structure of factors of production,the structure of three industries and the structure of final demand have all made the economic growth rate of China decline year by year.The consumption level and consumption capacity of people are the most important indicators of the living standards of the people and the areas that the central government focuses on under the new normal situation.According to the data,the share of consumption in China's total economy has declined since the 1990s.Obviously,this is closely related to the reform of income distribution,taxation,housing,health care,old-age pension and education.As the uncertainty brought about by the system change increases dramatically,the consumption behavior of urban and nural residents becomes more and more cautious,and the savings rate continues to rise.In order to encourage consumption,the Central Bank began to cut interest rates seven times since May 1996 and introduced interest taxes in 1999,even though bank deposits were not:squeezed out,for consumption.The topic of how to expand the consumption of urban and rural residents in China has become an area of concern and research for more and more scholars.Unlike the relatively stable social system and mature market system in developed countries,China's economy and society are still in transition.The institutional uncertainty brought about by the economic system reform in the transition period,the market uncertainty brought about by domestic and foreign economic development and regulation,and the limited rationality and incomplete information of economic actors will greatly increase the uncertainty of the future of urban and rural residents,especially the low-and middle-income groups,thus enhancing their preventive savings and weakening their consumer confidence.This is also why the urban and rural resident's consumption desire is so slow in recent years.More than 70 per cent of final consumption comes from household consumption,while more than 70 per cent of household consumption comes from urban consumption.At the same time,with the acceleration of urban and rural integration,the consumption of urban residents has more and more demonstration and driving effect on the consumption of rural residents.Therefore,the increase of urban residents 'consumption level plays an important role in expanding domestic demand.This paper firstly sums up the classical theory of consumption from the perspective of certainty and uncertainty,and defines the theory of random walking,precautionary saving,liquidity restraint and buffer-stock which consider the income uncertainty expectations as the theory of consumption xunder the condition of objective uncertainty.By contrast,the theory of behavioral consxumption,which arose in the 1980s,is regarded as the consumption theory under subjective uncertainty.Then through the analysis of the actual situation of deepening the economic system reform and accelerating the system transition in our country the author sums up the practicability of the classical consumption theory to the actual practice of our country and the aspect that needs to be expanded.On the basis of this,the research idea of this paper is determined:Firstly,analyzes quantitatively the urban residents' consumption ancd consumption structure through the macroscopic data;Secondly,analyzes the medical expenditure and medical burden of urban residents and their influence on the choice and allocation of,household assets based on the data of CFPS microdata which is from Beijing University Social Science Survey Center;Thirdly,we estimate the uncertainty of medical expenditure and income of urban residents in China by using discrete selection model and restricted interpreted variable model first,then study the precautionary saving behavior of urban residents under medical expenditure expectation by least square method and quantile regression in the buffer-stock frame.Fourthly,explain the above results by the mental accounting which belongs to the behavioral consumption theory.Through the empirical framework of the"macro-micro-psychological" above,some important conclusions are drawn in the following aspects:Firstly,since the police of reform and opening up,the increase of the total capital formation in China is higher than that of the final consumption.The contribution of net exports of goods and services to GDP fluctuated at or below 0,while the contribution of final consumption and total capital formation to GDP generally fluctuated in the opposite direction,with the former declining and less volatile,and the latter rising and more volatile;The final rate of consumption and the rate of consumption of the resident generally have shown a downward trend,especially since 2000,when the trend has become more pronounced.Compared with the major countries and regions in the world,the consumption rate of our country in recent years is not only much lower than that of the developed countries and regions such as the United States,the United Kingdom,Japan,Germany,the Republic of Korea,Hong Kong,China,eurozone,but also much lower than that of the developing countries such as India and Brazil.Secondly,the average consumption tendency and marginal consumption tendency of urban residents show a significant decreasing trend year by year.When it comes to the consumption structure of urban residents,the proportion of food consumption expenditure(i.e.Engel coefficient)and clothing expenditure generally show a downward trend;health care expenditure,culture,entertainment and education expenditure,transportation and communication expenditure,and residential consumption expenditure generally show an upward trend;the proportion of consumption expenditure on household equipment and services increased and then decreased.Thirdly,the CFPS microdata shows that between the year of 2010-2014,the burden of family's health care has been decreasing year by year,which in line with the conclusion of macrodata.By region,the eastern region,although the largest in absolute numbers of medical expenditure,but the medical burden is the lowest;The medical burden of urban residents in the central region was the largest,and the decrease was the lowest,while the medical burden in the western region was medium.This shows that there is a negative correlation between the size of medical burden and the level of economic development.Therefore,it can be said that the benefits of universal health insurance policy is relatively developed areas in the East,and the situation of medical burden of the vast majority of urban residents that in the central and western region is still very serious.On the Fourth,when the burden of medical care is increased,urban residents in China will choose to reduce the financial assets to mitigate the impact of medical expenditure;By contrast,when the medical burden is reduced,residents are more likely to choose this type of asset for protection;The level of savings or consumption in the western region is most affected by the burden of medical care,which is one of the important aspects of healthcare reform.On the Fifth,the effect of medical expenditure uncertainty on the ratio of asset to wage is much greater than the income uncertainty.The less developed the region,the stronger will to accumulate;Uncertainty about the future is expected to increase with age,leading to increased accumulation and reduced consumption capacity.The higher the level of education,the weaker the accumulation will,the stronger the consumption will.The results showed that the more low-and middle-income groups were,the more sensitive to the uncertainty of household income.Sixthly,the urban resident families in our country have different psychological accounts from the point of view of wealth storage and consumption,and different accounts have been labeled with different functions.Uncertainty about medical spending is expected to thicken the"bottom" of a pyramid-shaped portfolio of safe and secure assets.The assets are placed in current disposable income accounts and current asset accounts first.As future accounts"shrink"in uncertain expectation,consumers will transfer disposable income and some of the wealth of current asset accounts to future accounts to fill the gap in order to maintain balance between them.While the theoretical and empirical results show that the marginal consumption elasticity based on the current disposable income is significantly greater than that based on the current asset and the future income account,so the transfer of assets from the current disposable income account to the asset account and the future account under the uncertainty expectation necessarily means the overall decline in the marginal consumption tendency of urban residents.Based on the above conclusions,this paper puts forward some suggestions on reducing urban residents'uncertainty,stabilizing income uncertainty and increasing education investment.