Author(s)

Bo Fan

Corresponding Author

Bo Fan

Abstract

With the rapid development of economy, China's luxury goods market has entered a period of rapid development. How to treat the growing luxury consumption scale, and what is the causal relationships and interactions between luxury consumption and economic growth, has become a common concern issue among scholars and the whole society. This paper acquires the data related to economic growth and luxury consumption from 1999 to 2013, taking the total consumption of luxury goods and per capita GDP as the time sequences, to establish the VAR model, and then carries out analysis on the relationship between luxury consumption and economic growth. The results show that there is a close relationship between luxury consumption and economic growth: economic growth is the reason for the consumption of luxury goods, and luxury consumption has a positive effect on economic growth, but the effect is very limited.

Keywords

Luxury Consumption, Economic Growth, Vector Auto Regression, Co-Integration Test