TITLE:
A Research on the Relationship between Urban Households’ Income and Expenditure in Hainan
AUTHORS:
Junmei Zhou, Defei Zhang
KEYWORDS:
Panel Data Model; Income; Consumption; Urban Resident
JOURNAL NAME:
Technology and Investment,
Vol.4 No.1B,
January
17,
2013
ABSTRACT: APC (Average Propensity to Consume) refers to the ratio of dividing consumption by income during the same period, which reflects the percentage of consumption in current residents’ income. This paper analyses the APC and builds up models about the dynamic relationships between urban residents’ income and consumption expenditure in Hainan, with panel data model, choosing per capita annual disposable income as explanatory variable, per capita living annual ex-penditure as response variable, and data from the year of 2004 to 2010. The research shows that different income levels bring different impacts on consumption, and provides theories of adjusting the consumption structure, expanding do-mestic demand and promoting the economy development.