Rural Residents' Consumption During The Transition Period The Uncertainty Analysis

Based on the macro-environment background, this paper fully and systematically discussed the consumption uncertainty of the rural residents in China in empirical level. The empirical research is along one thread, which is the breakthrough from short-term analysis to long-term analysis by extending the certainty analyzing frame to the uncertainty one based on the inter-temporal optimal consumption choice theory.Firstly, we talked about the consumption of rural residents from the characteristics of descriptive statistics, giving a comprehensive introduction to the consumption at this stage. Next we conducted econometric analysis on the influence factors on the consumption macro-environment of rural residents in China. According to the analysis we established the empirical relation between the long-run equilibrium and short-run fluctuation of consumption and income. Furthermore, we examined, by verifying the micro-mechanism of consumption uncertainty, the extent of precautionary savings motives and liquidity constraints. We also utilized vector error correction model (VEC) to strictly verify uncertainty and precautionary savings' error correction mechanism on the consumption change of rural residents in China. Similarly, based on the test of consumption excess sensitivity, we used liquidity constraints model under inter-temporal optimal consumption to conduct uncertainty and liquidity test on rural residents. By doing this, we drew the empirical conclusion and offered explanation in both macro-level and micro-level.Finally, this paper, based on the above empirical analysis, drew the main analysis conclusion, which indicates that during the economic transitional period, consumption of rural residents is of typical uncertainty. Income level is the maim factor on consumption for rural residents. We, however, should not ignore the effect of other factors, especially the instability of institutional expectation and uncertainty of future income. We should make great efforts to provide institutional effective supply, exempting the consumers' future trouble. In addition, we also should do everything we can to increase the sustainable income of rural residents. Only by doing so, we can enhance the present consumption of the rural residents, and can consumption requirements be really expanded, and consequently the current situation of inadequate demand will be improved.