Income Expectation Gaps from Historical and Social Dual Perspectives on Consumption: Influence Mechanism and Mitigating Pathways

Based on the data from the China Household Finance Survey (CHFS), this paper employs the income expectation gap as an indicator to quantify psychological income loss. It investigates the impact of psychological income loss on consumption behavior and its underlying mechanisms from both historical and social dimensions. The findings indicate that the income expectation gap significantly restrains household consumption expenditure in a persistent manner, with the social expectation gap exerting a more pronounced inhibitory effect. The social expectation gap curtails consumption expenditure by diminishing household risk preference and enhancing precautionary saving motives. An increase in the liquidity ratio can notably mitigate the adverse effects of the income expectation gap on household consumption. Credit availability substantially alleviates the inhibitory impact of the social expectation gap on household consumption expenditure; however, this mitigating effect is less evident when considering the historical expectation gap. For high-income groups, households in central and western regions, and those headed by individuals with lower education levels, the income expectation gap exhibits a strong inhibitory influence. This study offers a novel perspective and empirical foundation for elucidating household consumption behavior and formulating policies aimed at stimulating consumer demand.