Precautionary motivation and consumption insurance: Empirical analysis of household consumption behavior in rural China

Chuliang Luo ()
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Chuliang Luo: Institute of Economics, Chinese Academy of Social Sciences, Beijing 100836, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2007, vol. 2, issue 1, 137-150

Abstract: Based on a household survey in rural China, this paper discusses parameters such as precautionary motive, excess sensitivity, consumption insurance,and inter-temporal substitution in the household consumption function in rural China. The conclusions of the paper indicate that there is a significant precautionary motive in household consumption in rural China, but the function of consumption insurance is very limited, and the consumption is also excessively sensitive to the income change. Such parameters are different among consumers within different groups.

Keywords: rural China; precautionary motive; excess sensitivity; consumption insurance (search for similar items in EconPapers)
JEL-codes: C2 D1 E2 O18 (search for similar items in EconPapers)
Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:2:y:2007:i:1:p:137-150

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