The Impact of Government Health Spending on Household Consumption: An AI-Driven Empirical Study

Abstract

The downward pressure on China’s economy is great, and the growth pace tends to be slow. In this context, how to effectively promote economic development and actively promote residents’ consumption while ensuring the health of people’s livelihood has become an important problem to be solved urgently in China. This study collected relevant data from 2000 to 2022 and used regression analysis method to deeply explore the internal relationship between government health expenditure, per capita disposable income of residents and consumer price index and consumer expenditure. The results show that there is a negative correlation between government health expenditure and household consumption expenditure, while per capita disposable income and consumer price index are positively correlated with household consumption expenditure. Further analysis of the reasons behind it shows that the increase of government health expenditure often leads to the corresponding decrease of public expenditure in other fields, especially when the government’s financial resources are limited, the redistribution of such resources will affect key areas such as education and infrastructure construction, and then indirectly affect residents’ consumption. In addition, a higher amount of government health expenditure may be passed on to residents by raising taxes or public service fees, thus inhibiting residents’ consumption. On the other hand, with the increase of the per capita disposable income of residents, the disposable funds in the hands of residents are more abundant and their spending power is enhanced. The consumer price index can reflect the level of inflation to a certain extent, and moderate inflation can stimulate residents’ willingness to consume, thus increasing the demand for all kinds of goods and services.— Based on the above conclusions, in order to effectively promote consumption and promote sound economic development, the following suggestions are put forward: adhere to the leading position of the government, allocate health expenditure scientifically and reasonably, build a sound health evaluation system, and continuously optimize the health system, so as to help consumption upgrade and realize the coordinated development of economy and people’s livelihood security.