Consumer credit constraints of Chinese rural households and its effect——Evidence from 10 provinces

WANG Juan, LI Rui

Systems Engineering - Theory & Practice ›› 2016, Vol. 36 ›› Issue (6) : 1372-1381.

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Systems Engineering - Theory & Practice ›› 2016, Vol. 36 ›› Issue (6) : 1372-1381. DOI: 10.12011/1000-6788(2016)06-1372-10

Consumer credit constraints of Chinese rural households and its effect——Evidence from 10 provinces

  • WANG Juan1,3, LI Rui2
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Abstract

Using recent survey panel data from 1000 Chinese rural households from 2005-2011, this paper attempted to estimate the extent of consumer credit constraints as well as its impact on the net income and consumption expenditure of rural households. Our results revealed that 83.7% of Chinese rural households were rationed in the credit markets. Of these, 55.2% were completely rationed and 24.2% were partially rationed. Furthermore, this consumer credit rationing caused a 13.7% loss in net income and a 25.6% loss in consumption expenditure for these rural households in China. Finally this paper proposes some policy suggestions based on the empirical results.

Key words

rural households / consumer credit constraint / welfare loss / panel data

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WANG Juan , LI Rui. Consumer credit constraints of Chinese rural households and its effect——Evidence from 10 provinces. Systems Engineering - Theory & Practice, 2016, 36(6): 1372-1381 https://doi.org/10.12011/1000-6788(2016)06-1372-10

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Funding

National Natural Science Foundation of China (71133001)
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