Analysis Of The Influence Of Habit Formation And Precautionary Saving On Consumption Behavior Of Urban And Rural Residents In China

Since the reform and opening up,China's economy has continued to achieve rapid development.At the same time,China's urban and rural residents' savings deposits continue to rise,while urban and rural residents' consumption is generally insufficient.What is the reason for China's "high savings and low consumption" status?Based on the standard consumer expectation utility maximization model,this paper establishes a theoretical framework for general analysis of residents' consumption and savings intertemporal optimization decision-making,and derives the optimal consumption function that affects residents' consumption behavior,and uses 31 provinces and cities in China.In 2017,the urban and rural residents' consumption panel data empirically analyzed the habit formation effects and preventive savings motives in China's urban and rural residents' consumption behaviors.The analysis shows that in the impact of wealth accumulation factors measured by the per capita savings of urban and rural residents on consumption,it is found that savings have a restraining effect on current consumption.The stronger the consumption inertia of residents,the more they rely on the pre-consumption,the lower the marginal propensity to consume,and the negative correlation between the two.China's urban and rural residents have significant internal habit formation effects and external habit formation effects.The current consumption of urban and rural residents is not only affected by the previous consumption expenditures,but also by the average consumption level of the surrounding population.Urban and rural residents have irrational comparisons.By introducing income uncertainty and consumption uncertainty,we find that there are preventive saving motives for urban and rural residents in China.The relative cautious coefficient of urban residents is 12.3,the relative cautious coefficient of rural residents is 6.3,and the relative cautious coefficient of urban residents is about For rural residents,the intensity of preventive savings incentives for urban residents is significantly higher than that of rural residents.At the same time,there are regional differences in the precautionary saving motives of urban and rural residents in China.For urban residents,the more developed the economy,the weaker the precautionary saving motivation;but for rural residents,the above conclusions are not.The habit formation effect and the existence of preventive saving motives will hinder the improvement of residents' consumption level,which is one of the important reasons leading to the current high savings in China.Finally,the article provides relevant policyrecommendations for improving the consumption level of urban and rural residents,narrowing the income gap and consumption gap between urban and rural residents,and solving the current situation of "high savings and low consumption".