Author(s)

Fan Wu

Corresponding Author

Fan Wu

ABSTRACT

Since China's economic growth is facing great uncertainty after the outbreak of the COVID-19 epidemic, how to give full play to the basic role of consumer psychology in economic growth and promote economic growth is a major problem we are facing. The expansion of residents' consumption should start with the basic needs of residents. According to the relevant consumption psychology theory, residents' basic needs in various types of consumption expenditures can be divided into physiological needs and psychological needs, which will be affected by the formation of consumption psychology. In this paper, China's rural areas were divided into high, middle and low-income areas according to the income level, and a panel ELES model including the theory of consumer psychology formation was constructed to empirically analyze the consumer psychology formation effects of various consumer expenditures of rural residents in high, middle and low-income areas in China at present, as well as the changes of psychological needs and physiological needs of various consumer expenditures in different income areas. The results show that the consumption psychology of development-oriented consumption expenditure (medical care, transportation and culture and education) is relatively large in rural high-income areas, while the consumption psychology of subsistence-oriented consumption expenditure (food, clothing and residence) is relatively large in middle-income areas. At present, rural residents in different income areas in China have the largest expenditure on housing consumption, while those in high-income areas, middle-income areas and low-income areas have the largest expenditure on transportation, education and medical care, respectively.

KEYWORDS

Time effect, Formation of consumption psychology, Panel ELES model, Consumption of rural residents