The effect of population aging on household consumption level in China

Abstract

This paper mainly focuses on the aging population’s effect on Chinese household spending level by using consumption tendency ratio as a dependent variable in the model with three main researching perspectives from the whole country, comparison with three main different regions, comparison before and after outbreak of COVID-19. The main data resources are obtained from the National Breau of Statistics of China with a total of thirty-one provinces for a ten-year period from 2011 to 2020. Empirical study in this paper uses an ordinary least squares model to analyze data and get the following main conclusions. Other conditions remain unchanged, the aging population do have impacts on the consumption behavior of Chinese residents since higher old dependency rate will lower down people’s spending tendency ratio; Only the eastern region shows a significant negative relationship between the old supporting ratio and people’s propensity to consume. The more significant influence level is listed from area in the eastern, middle area and western; The old age burden rate does not significantly impact on residents’ consumption tendency under the pandemic period.