Econometric Analysis of Chinese Urban Residents Income and Consumption

Consumption is not only the ultimate goal of social production, but also a strong force to maintain and stimulate economic growth; according to economics consumer theory, income is considered as the main objective factors to affect the consume. Therefore, analyzing the effect of income to consumption quantitatively has a very important sense on starting up and expanding consumption, and achieving economic endogenous growth. At present, many scholars have chosen quantitative analysis methods to do empirical research on income and consumption of some certain province or region. In this paper, using cointegration theory to analyze relationship between Chinese urban residents’ disposable income and consumer spending, we can get a conclusion that no matter from long-term or short term, to stimulate the consumption of urban residents we must increase the disposable income of urban residents.