Abstract: With the arrival of the new economic normal, whether China is in the process of consumption upgrading or degrading has caused concern and controversy. Based on the LC-PIH model and viscous consumption growth theory, this paper explores the theory and mechanism of consumption stratification, and combines the provincial panel data of 2002-2017 to analyze the dynamic characteristics and influence mechanism of consumption trends of Chinese residents from three dimensions: urban and rural, regional and income levels.The results show that the consumer market in China shows the characteristics of consumption stratification, and in the short term, the change of consumption of residents is mainly the difference of the speed of consumption upgrading among different groups, not the obvious difference of “upgrading” and “degrading”;at the same time, housing prices, income and consumption habits have heterogeneous effects on different groups′ consumption behavior,and the fluctuation of housing prices has urban-rural differences, regional differences and threshold effects on residents′ consumption behavior; urban and rural residents show strong income sensitivity; urban residents show stronger stickiness in making consumption decisions.

Key words: consumption stratification, housing price fluctuations, consumption sticky, dynamic panel model