Analysis of the Factors Affecting the Consumption Level of Urban Residents in China

Abstract

The savings of Chinese residents have remained high for a long time. However, the growth rate of consumption demand is relatively slower than that of savings. As China's urban basic old-age insurance expenditures continue to grow, it has affected the income level of urban residents, which in turn affects the consumption of urban residents. The factors affecting the consumption of urban residents in China are multifaceted. As one of the factors, China's endowment insurance is of great significance in carrying out research on the factors affecting the consumption of urban residents by Chinese pension insurance. Based on the combination of theoretical analysis and empirical analysis, this paper collects the per capita consumption level of urban residents in China from 2000 to 2017, the per capita savings of urban residents, the per capita disposable income of urban residents, and the per capita endowment insurance expenditure of urban residents. Based on these four types of related time series data, this paper built a model to analyze how China's pension insurance affects urban residents' consumption, and empirically explored the factors affecting the urban residents' consumption and their influence degree through empirical conclusions. Finally, combined with China's actual national conditions and development trends at this stage, this paper made policy recommendations based on foreign economic policies. Keywords—Pension; Urban residents’ consumption; Influencing factor; Time series data