Glamor Economics

Chapter 154

Chapter 19 Section 9 Confidence is More Important Than Gold - Consumer Confidence Index

In September 2008, at the United Nations General Assembly, facing the increasingly raging global financial crisis, Premier Wen Jiabao said that in the face of economic difficulties, confidence is more important than gold and currency.This sentence gave a boost to people all over the world working together to get out of economic difficulties.Confidence plays a vital role in the economic development of a country.

Under the influence of the global financial crisis, the ups and downs of the consumer market in the New Year of the Ox have attracted more and more attention.The outside world expects that China's economic growth will slow down significantly in 2009, but in the consumer markets of major cities in China, we can still see surprising purchasing power and consumer confidence that is hard to see in the West.

According to the data from the National Bureau of Statistics of China, the total retail sales of social consumer goods in China increased by 2008% year-on-year in 21.6, and urban and rural consumption is booming.During the Spring Festival, merchants from all over the country seized business opportunities and carried out marketing and promotional activities in an all-round way. The major business districts in Shanghai, Beijing, Guangzhou and other cities were open until around midnight at the end of the year. Although domestic and foreign tourists decreased, local consumption was strong. The streets are crowded with people, and the festive atmosphere is strong.

With the cold financial crisis on one side and the congested consumer flow on the other, we can't help but wonder, is this the "last madness"?Since the second half of 2008, the financial crisis in the United States has spread to the world, and China has also been affected.However, Chinese people's consumption has not been greatly affected during the Spring Festival, and consumer confidence is still strong.According to a survey, more than 80% of the residents' consumption during the New Year's Eve remained the same or increased steadily compared with the previous year, and 19% of the residents' annual consumption during the New Year's Eve decreased compared with the previous year.

Due to the impact of low-temperature, rain, snow and freezing disasters, the prices of daily necessities in various places rose by a large margin during the Spring Festival in 2008, but the situation in 2009 was different.According to the monitoring of the Ministry of Commerce, during the Golden Week period, the supply of daily necessities in the market is sufficient, and the prices of grain, edible oil, pork and eggs are basically stable.Stable prices have further promoted the consumption enthusiasm of the people.During the Golden Week of the Spring Festival (from the 2900th day of the Lunar New Year to the sixth day of the first lunar month), the total retail sales of social consumer goods across the country reached 13.8 billion yuan, a year-on-year increase of [-]%. This is an astonishing figure.

A survey shows that in 2009, among the residents with weak consumer confidence, 76% chose to cut down on eating out to reduce expenses, 73% might postpone their purchase plans and wait for the big price cuts in shopping malls, 60.9% might cancel their travel plans, and 57.9% would consider reducing travel plans. Number of times in bars, karaoke, shows and movies.In addition, 45.5% of residents may delay buying a car, and 23.2% of residents will choose online shopping to save money.

There is no doubt that although everyone has a clear judgment on the impact of the financial crisis, the Chinese economy has developed rapidly over the years, and the fundamentals of the Chinese economy have not changed. Most people still have confidence in the economic development in 2009 and believe that China has the ability to deal with it. temporary stress.This confidence is an important guarantee for us to get out of the impact of the financial crisis.

The emergence of consumer confidence index is the inevitable result of the development of social and economic theory.

At the end of World War II, with the gradual recovery of the American economy, the income and consumption of American nationals have undergone great changes.The economic circles were worried that for a period of time after the war, the United States would experience austerity and unemployment like the Great Depression in the 30s. The great confidence of the people is manifested in the fact that they put their ever-increasing income into consumption, and the total social demand expands rapidly.Consumption soared while the savings rate dropped from 1946% in the first quarter of 11.7 to 1947% in the second quarter of 2.2, the lowest point recorded in the United States in 50 years.The strong demand made the US economy not only not in recession in 1946, but faced with the pressure of inflation.As a result, the economics community began to pay attention to the relationship between the economic behavior of consumers and the macroeconomic process.

In the 20s and 40s, with the development and changes of the domestic economy in the United States, on the basis of Keynes’s consumption function theory, economists made a series of supplements and revisions to the relationship between consumption and income in theory. The theory of research on the relationship between relative income, permanent income, life cycle, consumer goods stock, etc. and consumption expenditure, as well as the assumption of liquidity constraints and future uncertainty on consumption expenditure.

The development of consumption function theory has revealed to people that consumer behavior is not only clinging, but also forward-looking with the continuous growth of income and the continuous improvement of credit system.As a rational consumer, when planning consumption, it is not only based on the current income level, but also based on the expectation of possible future income.If the future employment is stable and the increase in income is enough to offset the rise in prices, this optimistic expectation can prompt consumers to spend boldly or even borrow money to spend; on the contrary, if consumers think that the future is full of uncertainties, in order to prevent accidents, the impact on the family will be greatly reduced. impact, it will reduce current consumption and instead increase savings.Consumer expectations play a decisive role in making consumption and saving decisions.

In 1946, the U.S. Federal Reserve conducted a survey of household assets and liabilities. The original purpose of the survey was to collect information on assets and liabilities of households.Although at that time it was out of the need for technical means that consumers were first asked about their views on the economic situation, employment, prices, and interest rates, but later practice proved that this survey of consumers' views and expectations was an innovation.This sentiment was later referred to as consumer confidence.After practice testing and continuous development, the consumer confidence index has gradually been recognized and accepted by the society, and has become an important indicator of great concern in economic life.

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The Consumer Confidence Index reflects a country's citizens' satisfaction with the country's economic development and expectations for the future economic trend, predicts changes in future consumption expenditures, and is an important parameter for the government to judge whether citizens respond to the government's economic policies.Generally speaking, the growth of consumer income is the main factor for the stable trend of consumer confidence index.In addition, whether the price is stable and whether the economic development is stable are also important reasons that affect the consumer confidence index.

Consumer confidence index is composed of consumer satisfaction index and consumer expectation index.The consumer satisfaction index refers to the consumer's evaluation of the current economic life, and the consumer expectation index refers to the consumer's expectation of changes in the future economic life.The Consumer Satisfaction Index and the Consumer Expectation Index are composed of some secondary indicators: satisfaction with income, quality of life, macroeconomics, consumer spending, employment status, purchase of durable consumer goods, and savings; expectations for the next year, and expectations for the next two years Expectations for changes in home purchases and improvements, car purchases, and the stock market over the next six months.

The consumption function reflects the dependence between people's consumption expenditure and various factors that determine consumption. It is an important part of the quantitative research on consumer behavior and is the functional relationship between consumption and its determinants.There are many factors that determine the level of consumption, such as income, property, interest rates, and income distribution.Among them, income is the most fundamental factor.Therefore, the consumption function essentially refers to the functional relationship between consumption and income.

(End of this chapter)