Research on the Impact of Population Aging on Residents’ Consumption in the Taiwan, China

Objective/Meaning Exploring the impact of population aging on the consumption of residents in Taiwan helps to identify the real constraints of population structure changes on regional consumption growth and people's livelihood economic operation, and provides empirical evidence for deepening cross-strait integration and development and improving the well-being of Taiwan compatriots.

Methods/Procedures This paper selects balanced panel data from 20 cities (counties) in Taiwan from 2014 to 2024, totaling 220 observations, and uses a two-way fixed effects model to conduct an empirical analysis from the aspects of baseline effect, mechanism of action, heterogeneity characteristics and nonlinear relationship.

Results/Conclusions The research conclusions are as follows: (1) Population aging significantly reduces the consumption level of residents in Taiwan, indicating that changes in population age structure have become an important factor affecting regional consumption growth. (2) The mechanism test results show that population aging mainly inhibits consumption by reducing residents' income level. (3) Heterogeneity analysis found that the negative impact of population aging on the consumption of residents in the western plains, service-oriented areas and agriculture-oriented areas is more obvious. (4) Further research shows that population aging significantly reduces the proportion of subsistence consumption, while its impact on development-oriented and enjoyment-oriented consumption is not significant; at the same time, there is a significant inverted U-shaped relationship between population aging and residents’ consumption. This paper reveals the multidimensional impact of population aging on residents’ consumption and the operation of people's livelihood and economy in Taiwan, China, and can provide a realistic basis and decision-making reference for promoting cross-strait integrated development, improving livelihood security and consumption promotion policies to adapt to the trend of population aging, and coordinating regional development.