Title

A structural model of consumption : an application to China during the global financial crisis

Document Type

Journal article

Source Publication

The Journal of Socio-Economics

Publication Date

6-1-2012

Volume

41

Issue

3

First Page

284

Last Page

288

Keywords

China, Consumption, Emotion, Financial crisis, Psychological states, Structural behavioral model

Abstract

In this paper, we develop a structural model of consumption by incorporating psychological constructs which constitute important antecedents of household consumption and provide crucial structural linkages to the mental accounting evaluation of saving or consumption. Our model is tested using structural equation modeling (SEM). The model is applied to China for measuring consumption expenditure under uncertainty emanating from the 2008 global financial crisis. An empirical test using 9784 new Chinese household survey data show that our structural model is a significant improvement over the existing behavioral life cycle model, as it is able to capture the psychological states affecting different groups of consumers such as employed workers and unemployed retirees. Our new structural model of consumption fits the data very well. The results have important implications for public policy assessment.

DOI

10.1016/j.socec.2012.01.003

Print ISSN

10535357

E-ISSN

18791239

Publisher Statement

Copyright © 2012 Elsevier Inc

Access to external full text or publisher's version may require subscription.

Full-text Version

Publisher’s Version

Recommended Citation

Voon, J. P., & Voon, J. C. (2012). A structural model of consumption: An application to China during the global financial crisis. Journal of Socio-Economics, 41(3), 284-288. doi: 10.1016/j.socec.2012.01.003