The Research on Economic Development Based on Entropy Method and Grey Relational Analysis - From the Perspective of Residents' Consumption Level

Abstract

This article is based on the consumption function theory, with the development of domestic economic, consumption is the main driver of the economic and the leading factor on the growth of GDP. Obviously, the residents' consumption level can represent the trend of consumption of residents. Finding the incentive and analysing the reasons can contribute to sustainable economy. Five influencing factors are selected including the per capita fiscal expenditure, the consumer price index, commodity retail price index, the urban and rural residents' per capita deposits, residents' per capita income. Then, the entropy method is adopted to evaluate each index and assign weight. Combining with the grey relational analysis, we prefer to use the entropy weight of each factor rather than use the average coefficient for more comprehensive and reasonable results. And the comprehensive correlation degree is calculated. Finally, we select the statistical yearbook of Chengdu from 2007 to 2015, and the empirical analysis is carried out on the factors which influencing the residents' consumption level. The results show that the residents' per capita income not only takes the most important role in these factors, but also develops a gap gradually. The fiscal expenditure promotes the improvement of the residents' consumption level and the economy has been boosted. However the consumption of rural residents is prevented by the high deposits and it has led to an economic depression in some areas. We combine the two methods and analyse from the perspective of macro and micro angle, the influence of consumption on sustainable economic growth has been analysed based on these five factors, and the comprehensive analysis and reasonable suggestions are given in order to promote sustained economic development.