The Empirical Research Of Wealth Effect Of Asset Income And Non-Asset Income

In recent years, with the rapid development of economy in our country, the income level of residents rises ceaselessly and more and more families own real estate and stocks, bonds and other financial assets. As the rise of house prices, the prosperity of financial market and the reform of salary distribution system, the wealth of the residents increased dramatically, leading to changes in consumer spending, this phenomenon is also known as the wealth effect.At present, our country is in a critical period of economic transition.under the back-ground of the investment slowdown and export weakness, expanding domestic demand has been raised to an unprecedented strategic height in China’s economic development. Studying whether there is wealth effect and messuring the size of the concrete of the wealth effect, is of great significance to expand domestic demand and boost the domestic economy.This paper take the assets income and the non-assets income as the research objects. Considering the unstable situation of the wealth effect, panel threshold regression analysis is applied to the study of wealth effect, to explore the potential area transformation. Through the empirical analysis of annual panel data, including our country’s 31 provinces, municipalities directly under the central government and autonomous regions from 2002 to 2012, the results show that:Firstly, there exists significant threshold effect in asset income. With the increase of asset income, its role in promoting consumption presents a degressive trend. Secondly, there also exists significant threshold effect in non-asset income. With the increase of non-asset income, its role in promoting the consumption shows a tendency of decrease after increase first, which has the characteristics of "inverted U". In addition,In either case, the wealth effect of the non-asset income is greater than that of asset income. Finally, combined with the actual situation of our country, this paper gives economic explanation of the main conclusions and puts forward some corresponding policy recommendations.