KOU Enhui,HOU Hehong：Consumption Smoothing, Income Shocks and Partial Insurance——An Empirical Research based on Rural Household Survey

Abstract：Using the panel data of fixed observation points in rural areas, this paper analyzes rural residents' consumption insurance under transitory and permanent income shocks.We find that transitory income shocks can be partially transmitted to daily consumption offset by consumption smoothing mechanism.But most permanent income shocks are transmitted to consumption fluctuation.By further detailed studies, we find that compared with government transfers, transfers between relatives and friends can enhance the ability of consumption smoothing.Besides, engaging in nonagricultural employment, higher education and young head of household can promote rural residents' assurance level.In order to promote the rural consumption and release the consumption potential of rural area, it is important to conduct an in-depth analysis of rural residents' consuming behavior in face of income fluctuation.

Key words： Income Shocks    Partial Insurance    Transitory Income Shocks    Permanent Income Shocks

source:Finance & Trade Economics ,No.9,2015