A structural utility mediation model : China during the global financial crisis

In this paper, we analyze the effects of the 2008 global financial crisis (GFC) on consumer utility in China. Changes in consumer utility wrought by the GFC were measured by changes in consumption and income. Our empirical analysis using structural equation modeling (SEM) showed that the GFC had affected consumer utility directly and indirectly. The indirect effects were mediated by (a) the emotion or anticipatory feeling evoked by the GFC and (b) the change in saving culture or value of the Chinese. We found that route (a), but not (b), was extremely important in mediating the change in consumer utility. Contrary to conventional wisdom, the indirect effect was found to be stronger than the direct effect, pointing to the importance of the role of anticipatory feeling for assessing consumer utility. The model we obtain has a non-significant p value of 0.345 (df=9; Chi-square=10.063).