Restructuring Household Consumption through Fertility Decisions: A Systematic Literature Review from a Behavioral Economics Perspective

Abstract

This study investigates how fertility decisions under the context of China’s low fertility rate reshape household consumption structures through the lens of behavioral economics. Combining rational choice theory with behavioral biases such as loss aversion, mental accounting, social norms, and present bias, the research applies the PSR (Pressure–State–Response) model to systematically analyze the mechanisms behind consumption divergence. The “Pressure” stage identifies educational expenditure as a dominant driver of fertility pressure; the “State” stage reveals its role in sustaining low fertility trends; the “Response” stage examines how behavioral biases lead childbearing households to prioritize education-related spending while compressing hedonic consumption, whereas non-childbearing households reallocate resources toward self-oriented and instant gratification expenditures. The result of research not only provides evidence for the theoretical framework linking fertility decisions and household consumption patterns, offering empirical insights for targeted policy interventions, but also offers practical implications for aligning fertility policies with differentiated consumption demands.