Journal of Chemical and Pharmaceutical Research, 2014, 6(3): Research Article

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1 Available online Journal of Chemical and Pharmaceuical Research, 2014, 6(3): Research Aricle ISSN : CODEN(USA) : JCPRC5 Disposable income and acual spors consumpion expendiures correlaion research based on co-inegraion heory and error correcion model Honglan Jin Healh Science Cener, Yanbian Universiy, Yanji, Jilin, China ABSTRACT According o China consumpion expendiures, nominal GDP, governmen oal revenue, consumer price index ime series daa in 1978 o 2012, hen make use of hese four variables calculaing disposable income (Dinc) and acual spors consumpion expendiures (ACS) wo variables, afer ha uilize co-inegraion heory and error correcion model as well as oher economerics mehods o analyze relaionships beween Dinc and ACS. Research resuls show ha China disposable income and acual spors consumpion expendiures exiss co-inegraion relaionships; and during 10% significance levels, acual disposable income is he Granger cause of acual spors consumpion expendiures, on he conrary acual spors consumpion expendiures is no he Granger cause of disposable income. Key words: Disposable income, spors consumpion level, consumpion consciousness, co-inegraion heory, error correcion model, Granger causaliy es INTRODUCTION Wih he improvemen of living sandards of he people of China and implemenaion of naional finess program, people healh and spors consciousness srenghen as well as spors life-oriened, mercerizaion and indusrializaion deepen, people s consumpion demand in spors culural indusry are consan increasing, spors indusry has already become new and significan growh poin of naional economy. Especially in hese years, people invesed money and ime on spors have been obviously improved [1-3]. Naional economic saus, households disposable income are uppermos facors ha affec spors consumpion. No maer economics heory analysis or recen 20 years China and foreign counries research documens, residen income saus is main facor ha affecs consumpion and spors consumpion. There is an invesigaion ha displays he higher households per capia income are, he more paricipaing in spors consumpion would be, he higher proporion of consumpion in finess enerainmen cener and purchasing ickes o wach spors compeiions would be. Income levels direcly resric residen spors consumpion level, income level and households per capia spors consumpion behavior have higher posiive correlaions [4-6]. Recenly years, more and more scholars research disposable income and acual consumpion expendiures relaionships. Tian Qing (2008) verified in Our counry urban residen income and consumpion relaionships co-inegraion es-based on differen income classes empirical analysis ha consumpion and income have co-inegraion relaionship. Liu Li-Ying (2010) in Rural residen income and consumpion shor erm dynamic sae and long erm equilibrium relaionship empirical analysis, uilized co-inegraion, ECM model and Granger causaliy es as well as oher analysis ools, according o Hebei province saisics daa, i proved ha rural residen income and consumpion expendiures exis long erm sable co-inegraion relaionships. Bu here is sill lack of expers abou residen acual income and spors consumpion expendiures correlaion research. This paper on his basis, researches acual income and consumpion expendiures co-inegraion relaionships ha provides reference 920

2 for furher reasonable planning residen income disribuion. INDICATOR SELECTION AND DATA HANDLING Research objecs are spors consumpion expendiures and disposable income co-inegraion relaionships as well as heir error correcion model. Table 1 lised our counry residen oal consumpion expendiures(cs, uni is a hundred million RMB), nominal gross domesic produc( GDP, uni is a hundred million RMB), governmen oal revenue( Tax, uni is a hundred million RMB) in 1978 o 2012 and residen spors consumer price index wih 1978 as base year(cpi, year 1978 CPI=100) daa ha derives from China naional bureau of saisics annual daa and saisic yearbook (hp:// Table 1: Spors consumpion expendiures, nominal GDP, governmen oal revenue and residen consumer price index in 1978 o 2012 Obs CS GDP Tax CPI Use residen consumer price index CPI o adjus residen consumpion expendiures CS, i ges acual consumpion expendiures; according o Deng Feng invesigaion resul, residen spors consumpion expendiures is nearly 3.03% of acual consumpion expendiures ha ACS=3.03%CS/CPI; acual disposable income Dinc is go by following calculaion :Dinc= (GDP-Tax)/CPI. ACTUAL SPORTS CONSUMPTION EXPENDITURES (ACS) AND ACTUAL DISPOSABLE INCOME (DINC) CO-INTEGRATION ANALYSIS Model esablishmen In order o reduce daa flucuaion, value naural logarihm for acual spors consumpion expendiures ACS and acual disposable income Dinc, i ges series lnacs and lndinc, carry ou saionary es on he wo and esablish following equaion (1): ln ACS = c + c1 ln Dinc + ε 0 (1) Model es Two variables sequence char: Make wo sequences hrough Eview 6.0 o sequence char drawing refers o Figure 921

3 1, boh wo sequences are in rising rends, obvious hey are no sable, bu he wo has roughly same growing and changing endencies, which indicaes he wo may exis co-inegraion relaionships. However, o verify ha he wo have co-inegraion relaionships, i should firs check he wo single inegraion orders, if all are one order single inegraion, hen hey may exis co-inegraion relaionships, if single inegraion orders are no he same, hen i should adop differenial way o conver hem ino one order single inegraion sequence [7]. Figure 1: LNACS and LNDINC sequence char Sequence uni roo es: Classical ime sequence analysis and regression analysis have los of hypohesis premises, such as sequence sabiliy, normaliy and so on, on he condiion ha hese hypohesis are me, carried ou es, F es and ohers will have higher reliabiliy. Bu ime sequence daa in general economic analysis are mosly non sable, all have cerain growing endency, herefore when carrying ou co-inegraion analysis of hese daa, i firs carries ou saionary es, judge daa sabiliy mehod normally is wih he help of uni roo es. According o uni roo es basic seps, uilize Eview6.0 sofware, carries ou saionary es on lnacs and lndinc, es resul refers o Table 2. Table 2: Uni roo es resul Variable Checking form(c,, k) ADF value 1% criical value 5% criical value10% criical value P Resul LNACS (c, 0, 0) non sable D(LNACS) (c, 0, 0) sable LNDINC (c, 0, 0) non sable D(LNDINC) (c, 0, 0) sable Table 2 resul shows for LNACS, under significance level and 0.1, uni roo esed Mackinnon are respecively , and , es saisics value is larger han criical value, so ha i canno refuse H; I indicaes ha LNACS sequence exiss uni roo, is non saionary sequence. Similarly, i is clear ha LNDINC is also non saionary sequence. In order o ge LNACS and LNDINC sequence single inegraion orders, carry ou uni roo es on one order difference sequence ha appoined by uni roo es dialog box, selec inercep iem, lagging difference iem selecs 1 order. For D(LNACS), from able 2 es resul, under significance level and 0.1, uni roo esed Mackinnon are respecively and , es saisics value is , less han 1% significance level criical value, indicaes D(LNXM) is saionary sequence under 1% significance level, use he same mehod, i can be go ha D(LNDINC)is also saionary sequence under 1% significance level, ha is D(LNACS)~I(1) D(LNDINC)~I(1). Model esimaion: Make esimaion on equaion (1) hrough Eviews6.0, esimaion resul as following Figure 2 shows: 922

4 Figure 2: OLS esimaion resul From Figure 2, i is clear equaion esimaed resuls are all remarkable, afer equaion adjusmen coefficien of deerminaion R 2 = , very close o 1, indicaes model fiing effec is beer. LNDIC coefficien esimaion value expressed spors consumpion expendiures income elasiciy, he coefficien esimaion value is , indicaes disposable income increases 1%, acual spors consumpion expendiures will increase %. Excep for D.W saisics value is smaller, oher saisics show model esimaion effecs are relaive ideal. Residual sequence uni roo es: Firs esablish model formula (1): u = ln ACS c 0 c1 ln Dinc Carry ou uni roo es on u. If residual u is sable, hen i indicaes sequence ln ACS and co-inegraed. ln Dinc (2) are The nex, residual es Through Figure 3, i is clear ha under 1% significance level, es saisics is , less han corresponding criical value, so ha residual sequence doesn exis uni roo and is saionary sequence, which shows ha acual disposable income (LNDIC) and acual consumpion expendiures (LNDINC) have co-inegraion relaionships. Figure 3: Residual uni roo es resul Co-inegraion es and error correcion model esimaion Co-inegraion es: Co-inegraion refers o single ime sequence daa is no sable, bu heir some linear combinaions may be sable, ha is o say, hese variables have long-erm sable equilibrium relaionships (co-inegraion relaionship). There are wo mehods for esing wheher variables daa are co-inegraed or no, one is esing on regression resuls residual which is also called single equaion co-inegraion es; he oher is wo-phase co-inegraion es based on EG, his paper adops he second mehod. 923

5 Error correcion model esablishmen ln ACS Equaion 1 describes sequence and ln Dinc long-erm equilibrium relaionships, o check acual consumpion expendiures and acual disposable income dynamic relaions, i needs o carry ou analysis wih he help of error correcion model. Error correcion model: D ln ACS = c + c D ln Dinc + c ecm + e (3) Among hem, ecm is error correcion iem, and ecm = ln ACS 1 c0 c1 ln Dinc 1. Error correcion model esimaion From Figure 4, i is clear model esimaion resul F saisics corresponding probabiliy value P is quie small, 2 D ln Dinc R =0.725 so ha indicaes model esimaion overall is remarkable. Coefficien esimaion value is also very remarkable, which can be explained as spors consumpion expendiures shor-erm elasiciy on income changes ha is income increases 1%, hen in shor erm, spors consumpion expendiures will increase around %, less han %. Error correcion iem ecm (-1) coefficien esimaion value under 10% es level is remarkable, he coefficien reflecs adjusmen of residen spors consumpion expendiures deviaing long-erm equilibrium relaions, he bigger is absolue value is, hen he faser recovering non-equilibrium sae o equilibrium sae speed would be. Especially, if error correcion iem ecm (-1) coefficien esimaion value is 0, hen i indicaes ln ACS and ln Dinc changes should be immediaely adjused in he same period. Figure 4: Error correcion model esimaion resul Error correcion model esimaion resul: D ln ACS = D ln Dinc ecm =(2.2033) ( ) ( ) 2 R = DW= F= D ln Dinc Coefficien esimaion value is very remarkable, which can be explained as spors consumpion expendiures shor-erm elasiciy on income changes ha income increases 1%, hen in shor erm, spors consumpion expendiures will increase around %, less han %. Error correcion iem ecm (-1) coefficien esimaion value under 10% es level is remarkable, he coefficien reflecs adjusmen of residen spors consumpion expendiures deviaing long-erm equilibrium relaions, he bigger is absolue value is, hen he faser recovering non-equilibrium sae o equilibrium sae speed would be. Especially, if error correcion iem ecm (-1) ln ACS coefficien esimaion value is 0, hen i indicaes ln Dinc and changes should be immediaely adjused in he same period. Use esimaed model, we can analyze spors consumpion expendiures shor-erm flucuaion. Spors consumpion expendiures flucuaion can be divided ino wo pars, one is due o shor-erm income changes influences; he oher 924

6 one is due o previous erm spors consumpion expendiures deviaed from long-erm equilibrium relaionships influences. Assume ha previous erm spors consumpion didn deviae from long erm equilibrium relaionships haecm = 1 0, hen he erm consumpion expendiures flucuaions are all derive from he erm acual disposable income flucuaion influences. If he previous erm spors consumpion deviaed from long erm equilibrium relaionships ha ecm 0 1, hen in order o mainain acual spors consumpion expendiures and acual disposable income long-erm equilibrium relaionships, he erm will make adjusmen of he previous erm consumpion expendiures and income non equilibrium sae a he speed of (ha is error correcion iem coefficien esimaion value), pull i back o long-erm equilibrium sae. For example, if previous erm excessive consumes, Then his erm spors consumpion expendiures should have some reducion. GRANGER CAUSALITY TEST The mos effecive mehod o es variables causaliy is Granger causaliy es, he research afer muliple experimens, finally selecs lag phase as 2, Granger causaliy es resul on LNACS and LNDINC wih measuremen sofware Eviews6.0 can refer o Figure 5. Figure 5: Granger causaliy es resul From Figure 5, i is clear ha under 10% significance level, acual disposable income is he Granger cause of acual spors consumpion expendiures, on he conrary acual spors consumpion expendiures is no he Granger cause of disposable income. Tha is o say, acual disposable income promoes acual consumpion expendiures, bu acual spors consumpion expendiures have no grea promoion on acual disposable income. CONCLUSION Through above empirical research, resuls show acual disposable income and acual spors consumpion expendiures have long-erm equilibrium relaionships, Granger causaliy es indicaes acual disposable income has significan promoion on acual spors consumpion expendiures, however, acual spors consumpion expendiures influences on acual disposable income is no significan. Though residen acual disposable income is increasing year by year, and i plays significan roles in spors consumpion expendiures, bu i sill hasn arrived a ideal sae ha causes consumpion pulling funcions on demands blocked. These causes may be lead by residens focus on deposis, ignore consumpion as well as social insurance sysem no perfec. Residen consumpion expecaion is low. Sugges ha governmen depar focuses on consumpion when focuses on accumulaion, meanwhile perfec social insurance sysem, improve residen spors consumpion posiiviy, improve consumpion srucure, increase naional physique. REFERENCES [1] QIU Shuang-yue e al. Journal of Anhui Agriculural Sciences, 2010, 38(19), [2] WANG Jian-hui. Journal of Anhui Agriculural Sciences, 2012, (11), [3] Bing Zhang. Journal of Chemical and Pharmaceuical Research, 2014, 5(2), [4] Zhang B.; Zhang S.; Lu G.. Journal of Chemical and Pharmaceuical Research, 2013, 5(9), [5] CUI Lanying, LIU Mingming, JING Ling. Journal of Wuhan Insiue of Physical Educaion, 2013, 47(5). [6] SHEN Fu. Journal of Wuhan Insiue of Physical Educaion, 2013, 47(2), : [7] WANG Xu-zhong, ZHENG Fang. Zhejiang Spor Science, 2013, 35(3). 925