The Prediction Of Consumer Spending Based On Lasso Method And BP Neural Network

Consumption is an important part of the national economy,together withinvestment and exports is vividly called "three carriages of stimulating economic". Inrecent years, with the increase of China’s urban and rural resident’s income, highsavings and investment overheating, while consumer demand is particularlyinsufficient, resulting in China’s economy suffered a severe demand constraints. Inthis case, to predict the future household consumption in China, not only helps tounderstand the development trend of the household consumption, but also for theexpansion of domestic demand and promote sound and fast economic has a certainsignificance.First of all,based on the comprehensive consideration of various factors thataffect consumption,using the Lasso method,respectively constructed urban and ruralresidents consumption expenditure model of China, and carried on the empiricalanalysis using the statistical data of1981-2012.The empirical results showed thatseven variables affect urban resident’s consumption significantly,including the urbanresident’s disposable income,inflation,interest rates,young dependency ration,ect;therural resident’s disposable income,inflation,social security expenditure and other sixvariables affect the consumption of rural residents significantly.Secondly,on the basisof variable selection, created a multivariate prediction model based on thecombination of Lasso method and BP neural network,and prediction of China’s urbanand rural residents consumption expenditure,the prediction results showed that:thecombination of Lasso method and BP neural network prediction accuracy is higherthan that of the BP neural network,the Lasso method,the results also showed that in2013-2015years, the growth rate of rural residents consumption has improved,theconsumption of urban residents increased slowly, the gap between urban and ruralconsumption rate showed a downward trend,but the gap between urban and ruralconsumption is still difficult to ease in the short term.