Regional Differences In Chinese Residents' Consumption Function

Because of the differences in the levels of economic development, social environment, historical and cultural traditions, there are too many differences in consumer psychology and behavior among different regions. It means that residents in different areas have different consumption functions. Economic policies aimed to promote the consumption should be fully taken into account regional differences in household consumption functions, to achieve the desired results.After all, income is the foundation of consumption, but different sources of income create different "consumer groups", and there are lots of differences in consumer psychology and behavior among these "consumer groups". To study China's household consumption function differences among different regions, Chinese people's consumption characteristics should be fully take into account. Then the macro-consumption function can be re-constructed according to sources of income among different "consumer groups". In this paper, the new macro-consumption function not only considered the "uncertainty" and the "ratchet effect" factors which may affect household consumptions, but also introduced the variable of government spending in order to reflect the economic policies'effects on household consumptions visually.In the empirical research phase, contrast these four regional consumption functions, Shanghai, Shandong, Shanxi, Yunnan, the paper found that: there are differences in main factors that affect consumptions among different regions; even if the same factors may have different effectiveness among different regions, not only in forces but also in directions. To improve the level of household consumption, and then stimulating domestic demand and promoting economic growth, the Government's economic policy should be fully taken in to account the regional differences in the consumption functions.