Risk Event Experience and Household Consumption Behavior: Based on the Perspective of Group and Individual Differences

From the perspective of the difference between group and individual risk events, this paper makes a comparative study of the impact of two types of risk event experiences on household consumption behavior and the mechanisms behind it. Based on CHFS nationally representative 5-round unbalanced panel microdata, we conduct a detailed empirical analysis using the PSM-DID method. We find that group risk experience and individual risk experience have entirely different impacts on household consumption behavior. Households experiencing individual risk events exhibit a significant increase in total consumption, particularly in medical expenditure, whereas households experiencing group risk events do not display significant changes in their consumption behavior. Further analysis shows that the lack of sufficient government support and limited social interaction for households experiencing individual risk events are key reasons for the differences in consumption behavior between the two types of households. The heterogeneity analysis indicates that changes in household consumption after risk events vary depending on factors such as household support burdens, government medical security levels, and social characteristics. The conclusion of this paper shows that government relief and social interaction positively affect households’ consumption behavior, and the government needs to fully consider the differences between different types of risks when formulating risk treatment measures.