Analysis of Chinese Urban Residents' Consumption Function——Based on the Data from 1978 to 2004

Base on the development of consumption theory,the consumers' data of 1978-2004 in China are used in this paper to research the dynamic relation between consumers' choice and factors that could influence the consumption choice.The results of the model shows that disposable income is the dominant factor that explains the consumption pattern of urban residents and the permanent income is the dominant explanation for the national residents' choice.The uncertainty,especially the uncertainty on labor income,also has large influence on the decision.Other factors,for example,interest rate is not statistically significant.