The U.S. Consumption by Using Regression Analysis

Authors

  • Songyi Paik SUNY Geneseo

Abstract

This presentation analyzes which factors affect consumer consumption, by using regression analysis, and these components should be considered by the U.S. government to promote economic growth. Because consumer spending is one of the most important components of Gross Domestic Product (GDP), examining the factors of consumer spending indicates various ways to improve the economy. While studying the GDP components in macroeconomics, there was one interesting feature that the United States has the higher marginal propensity to consume than other countries. Considering consumer spending accounts for two-thirds of the U.S. economic activities, the high marginal propensity to consume in the U.S. contributes to the development of the U.S. domestic market and economic growth. If the government notices economic downturn, they can target factors which can increase consumption to activate domestic economy. There are independent variables to affect consumption expenditures: personal disposable income, interest rates, oil price and recession. In Council of Economic Advisers report, “The Economy in 2014â€, it says consumer spending increased because of the consumer high sentiment with increase in real wages, declining gasoline prices, and employment expectations. Based on these potential variables, this project examines which factors are useful to explain the changes in consumer spending. Moreover, how U.S. government can manage them to achieve the continuous economic growth.

Faculty Mentor: Mansokku Lee

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Published

2015-12-01

Issue

Section

Social Sciences