Author(s)

Fangfang Hou, Kefeng Ai

College of Science, University of Shanghai for Science and Technology, Shanghai, China.

This paper studied the clustering analysis of panel data, the specification test of panel data model and its parameter estimation. By carrying out clustering analysis on panel data, we finally decided to study the relationship of Chinese urban residents’ eight income levels between consumption and income from 2007 to 2012. Based on analysis of covariance in panel data model, we built the variable coefficient panel data model and then estimated the model parameters. In this work, we can identify the relationship between consumption and income in recent years. According to the estimation results, we drew the conclusion that income disparities have important influence on urban residents’ consumption behavior.

Panel Data, Consumption and Income, Clustering Analysis, Analysis of Covariance, Variable Coefficient, Parameter Estimation

Hou, F. and Ai, K. (2015) The Empirical Research of Relationship between Consumption and Income for Chinese Urban Residents. Open Journal of Applied Sciences, 5, 251-258. doi: 10.4236/ojapps.2015.56026.