Wealth Effect of Stock Market on Residents´ Consumption: In the Angle of National and Regional

Based on the quarterly data ranging from 2000 to 2010, this paper studies the wealth effect of China´ stock market on residents´ consumption in national angle of view. Then, it compares the income effect and wealth effect on residents´ consumption among Shanghai, Hubei and Guizhou, which are selected as representative regions from eastern China, central China and western China. The empirical analysis indicates that: the wealth effect exists in China´s stock market but the effect is weak at the present stage of China. However, in the long run, the wealth effect of stock market is hysteretic and prolonged. Through comparing with three different regions, it can be seen that the income effect is decreasing as the region is better developed, while the wealth effect is increasing.