Psychological Needs, Physiological Needs and Regional Comparison Effects

This paper innovatively constructs a panel extended linear expenditure system (ELES) model including the theory of internal and external habit formation and analyzes the time effect of consumption habits and the regional differences of the comparison effects on rural residents in a variety of consumption expenditures from a temporal and spatial perspective. This research demonstrates the following. Firstly, overall, rural residents have least internal habits in terms of subsistence spending, followed by developmental spending and the most in enjoyment spending. Secondly, China’s rural residents consider the “actual use value” of commodities in “introverted” consumption expenditures; but in “export-oriented” consumption expenditures, besides the “actual use value” of the goods, they also seek to fulfill their “emotional demands”. Thirdly, there is the largest comparison effect on food and housing consumption expenditures for rural residents in coastal economic developed regions, and the smallest comparison effect on clothing, transportation, cultural and educational expenditures. It is the largest comparison effect on clothing and medical care expenditures for rural residents in underdeveloped regions of the central and western, and the smallest comparison effect on food and housing consumption expenditures.


Introduction
Do all kinds of consumption expenditures have a time effect? Are there any regional differences in the comparison effect? Physiological needs are the first needs of human beings, and also the most basic and minimal needs of human beings, such as the needs of food, clothing, shelter to meet the needs of relieving hunger, keeping out the cold and sleeping. If these needs cannot be met to a minimum, human beings cannot continue to survive and multiply. Psychological needs are the highest and most advanced needs. The Hierarchy of Needs Theory of the famous American Psychologist Maslow believes that psychological needs include safety, love and belonging, being respected and selfrealization. According to consumption theory, residents seek to fulfill both physiological and psychological needs by means of various types of consumption expenditures. Physiological needs are not related to income, but psychological needs are affected by income as well as previous expenditures (i.e., habit preferences). With an increase in consumer income, the associated with consuming certain commodity changes over time and, to a certain extent, psychological and physiological needs changing over time reflects the essence of residents' demand for this type of commodity. We call this phenomenon a time effect. The comparison effect is also called the joint external positive effect, that is, the consumer's demand for a certain commodity will be affected by the demand for the same kind commodity for other people around. In addition, different regions have different nationalities, consumer groups, regional cultures and government functions because of the constraints and influences of the natural and social environment. These factors affect local residents' consumption behavior and form different regional consumption characteristics. Furthermore, after Chinese economy has entered a new normal, the consumption situation has undergone significant changes, consumption patterns have continued to innovate, and personalized and diversified consumption has gradually become the mainstream. According to the National Bureau of Statistics, the contribution rate of final consumption to economic growth in 2019 is close to 60%. Consumption is still the main driving force for economic growth, but the current institutional obstacles which are restricting the expansion and upgrading of consumption are still prominent. Consumer markets in key areas are still unable to effectively meet the multi-level and diversified consumption needs of urban and rural residents. The consumption policies for different geographical groups still lag behind the needs of consumption improvement and capacity expansion. The consumption policy system is still unable to effectively support the improvement of residents' consumption ability and expected improvement. Therefore, the goal of this study is to: study the time effect of the physiological and psychological needs of various types of rural residents' expenditures, grasp the regional differences in the comparison effect of rural residents in various types of consumption expenditures, explore the consumption potential of rural residents, guide rural residents to rationally expand their consumption, and promote the consumption structure. It is of great practical significance to optimize, upgrade and enhance the basic role of consumption in economic development.
In the current research on residents' consumption behavior, few documents study the dynamic changes of rural residents' psychological and physiological needs in various consumption expenditures from the perspective of habitual preference; few documents have studied the regional differences and dynamic characteristics of the "comparison effect" of rural residents in various consumption expenditures. The biggest contributions of this paper are: First, embed the theory of internal habit formation into the panel ELES model and build a panel ELES model within time effects, and empirically study the dynamic changes of the physiological and psychological needs of rural residents in different regions for various consumption expenditures; the second is to embed external habits into the panel ELES model to empirically study the differences in consumption comparison effects of rural residents in different regions.
The influence of internal and external habits on consumer behavior is a complex social and psychological phenomenon that is not only affected by consumers' own needs, motivations and other psychological factors but also by the external social environment of consumers, such as the social economic culture, consumer family environment and consumer groups. Habit formation theory posits that due to the "ratchet effect" and "demonstration effect" of consumption, consumers' behavior is affected by an individual's early consumption level (i.e., internal habit formation) and the consumption behavior of surrounding groups (i.e., external habit formation). Robert A. Pollak first introduced internal and external habit formation into the extended linear expenditure system (ELES) model in 1970 and 1976 [1,2]. Based on Pollack's research [1,2], Louis Phlips [3] introduced state variables representing the impact of early behavior into the ELES model to reflect the impact of income changes and early behavior on the consumption structure.
Since then, habit formation has been introduced into various studies on resident consumption expenditures and household savings. Matthew T. Holt and Barry K. Goodwin [4] introduced the reverse almost ideal demand system to study the impact of habit formation on meat expenditures in the United States. Bob Alessie and Federica Teppa [5] discovered that habits form evidence supporting Dutch residents' saving behavior. Roman Muraviev [6] identified detailed characteristics about the optimal consumption flow for the problem of maximizing habit formation utility. Benjamin Verhelst and Dirk Van den Poel [7] used the spatial panel data model to empirically analyze the impact of internal and external habits on different levels of consumer spending. Hein de Vries et al. [8] studied the influence of habit formation and an individual's previous behavior on fruit consumption. Chetty and Szeidl's [9] research demonstrated that the formation of consumer habits leads to oversensitive and too smooth consumption. Emmanuelle Augeraud-Veron et al. [10] improved the internal habit formation model through infinite dynamic programming. Tiong-Thye Goh et al. [11] used political participation cases to show evidence of habit formation in social media consumption. Fatya Alty Amalia et al. [12] conducted a study on halal food purchases of Indonesian millennials and showed that purchase intentions and habits can independently influence their purchase behavior. Foreign scholars have studied the impact of internal and external habits on household savings, consumption expenditures and individual consumption. Even though a few scholars have introduced the formation of internal and external habits into the ELES model, they have not applied a panel ELES model.
In recent years, habit formation theory has also been introduced into different mathematical models by domestic scholars to study its impact on resident consumption. The first category studies the impact of internal and external habits on the total consumption of urban and rural residents. The results demonstrate that habit formation is an important explanatory variable affecting residents' consumption [13]. Urban and rural residents' consumption shows significant internal habit formation. Internal and external habit formation has a significant impact on urban residents' average propensity to consume and their consumption structure [14][15][16]. From the perspective of consumption structure, rural residents' various consumption expenditures show significant internal habit formation and their consumption of transportation, communication, education, cultural and entertainment services is affected by the demonstration effect of urban residents' consumption [17]. The consumption behavior of urban residents has a demonstration effect on rural residents [18]. New urbanization has accelerated the improvement of residents' consumption levels through the "demonstration effect" of external habit effects [19]. The formation of habit slows down the rate of changes in urban residents' consumption and inhibits the increase in consumption propensity [20]. Since the reform and opening up, the consumption behavior of rural residents in my country has obvious habit formation effects. Both excessive sensitivity and habit formation effects are greatly different due to the different stages of farmers' income growth rate [21]. The second category studies the impact of internal and external habits on urban and rural residents' food consumption. The results demonstrate that habit formation has a significant impact on food consumption [22,23]. Habit formation will affect people's decision to consume carbonated beverages [24]. In addition to food consumption, the family can only consume household services and products [25]. Different consumers have different consumption choices for entertainment such as travel [26]. The formation of these different habits may also be reflected in the choice of domestic and foreign products [27]. Suppliers will also adopt different policies based on the heterogeneity of consumer choices [28]. Even though there are many studies examining the impact of regional differences on consumption, most suffer from shortcomings. First, the current literature focuses on the geographical factors that affect consumption in the physical environment (including the natural environment and transportation, communications, medical and other infrastructure) and the non-material environment (factors such as government functions, economic differences, income levels, social security, etc.). However, few studies have explored the impact of external habit formation in different regions on various types of consumer expenditures from the perspective of regional differences. In fact, different regions have different consumption cultures, so there are significant differences in the consumption behavior, psychology and shopping habits of local residents that influence their consumption of various commodities. There is little literature that has examined the regional differences and dynamic characteristics of the "comparison effect" on rural residents in terms of their various consumption expenditures.
Regarding the research on the impact of environmental or regional differences on consumer behavior, domestic and foreign scholars have investigated the impact of regional differences on consumer behavior in the following aspects. The first aspect is the impact of the material consumption environment on the consumption of public goods and quasi-public goods provided by the government, such as environmental, transportation, communications, medical and other infrastructure-related commodities of a region. For example, government expenditures in different places have an impact on consumption [29][30][31]. There is a stable co-integration relationship between medical and health expenditures and natural con-ditions in different places and local rural residents' consumption. These factors have a significant impact on the growth of rural residents' consumption [32]. There are significant differences in the impact of rural circulation infrastructure environment on rural consumption structures and expenditures [33]. Factors such as "urbanization" in rural areas, the "dual structure of urban-rural circulation," "poor supporting services (after-sales)," and "expired goods" have a significant impact on the consumption gap between urban and rural residents [34]. Different regions and different types of infrastructure investment have different crowding-out effects on household consumption [35].
The second aspect concerns the impact of the non-material consumption environment on consumption. For example, governmental functions in different regions have an important influence on the consumption behavior of local residents [36][37][38][39]. Consumers in different social environments have a "demonstration effect" on local residents' consumption [40]. The social consumption environment in which consumers are located has a significant impact on various consumer demands [41]. Domestically, the regional economic and income differentials between provinces are the main reasons for the increase in the inter-provincial consumption gap [42]. The consumption of various regions in rural China has been divergent since 1993 [43]. Regional per capita disposable income and regional development are the central factors affecting consumption differences between rural and urban residents [44]. The influence of income level, urbanization rate, real estate market development scale and consumption habits on residents' consumption levels features significant regional differences [45] and the effects of the borrowing level and income gap on residents' consumption shows that there are regional differences between urban and rural areas and regions [46], such as imperfect social security and regional development imbalances in terms of the nature and degree of consumption [47]. The fluctuations in housing prices in different regions significantly impacts local urban residents' consumption expenditures [48], and urban-rural and regional differences have a major impact on the slowdown in consumer growth and the welfare effects of unequal consumption [49]. China's urban household consumption inequality is closely related to regional differences, with the lowest consumption in the western region, the second-lowest in the central region and the highest in the eastern region [50].
Even though the extant literature has previously examined the impact of regional differences on consumption, there are still imperfections in this regard. First, the current research mainly focuses on the regional factors affecting consumption in the physical environment (the natural environment and transportation, communications, medical and other infrastructure) and the non-material environment (government functions, economic differences, income levels and social security). Few studies have examined the impact of external habit formation in different regions on various types of consumption expenditures from the perspective of regional differences. In fact, there are different consumer cultures in various regions and large differences exist in the consumption behavior, consumer psychology and shopping habits of the local residents, which affects the consumption of various commodities. Second, few studies have discussed the regional differences and dynamic characteristics of the "comparison effect" of rural residents in various types of consumption expenditures from different geographical perspectives and analyzed whether a comparison effect exists between the various types of consumption among the different regions.
Therefore, this article closely combines the ELES model, the utility function and the habit formation theory to build a new empirical research model to examine the "comparative effect" of consumption in different regions of China and the time effects of the physiological and psychological needs of residents' various consumption. The biggest contribution of this article to the current literature is as follows. First, this paper embeds internal habit formation theory into a panel ELES model, constructs a panel ELES model with time effects and empirically examines the effects of dynamic changes in the physiological and psychological demands of rural residents on consumption expenditures in a variety of regions. The second is to embed external habits into the panel ELES model to empirically study the differences in the consumption comparison effect of rural residents in different regions.
Corresponding to the "ratchet effect" and "demonstration effect" concepts originally proposed by James S. Dusenberry, habit formation in modern consumption theory is generally divided into "internal habit formation" and "external habit formation." The former describes the effect of consumers' past consumption experience on their utility function while the latter indicates the influence of model groups' consumption behavior on consumption decisions. Therefore, we first introduce the formation of internal and external habits into the ELES model and construct a panel ELES model that includes the formation of internal and external habits.

Internal Habit Formation Model
Robert A. Pollak (1970) first put the formation of internal habits into the ELES model, and believed that the formation of internal habits affects basic needs, and the form of dependence of basic demand on previous consumption can be divided into the following forms: . Obviously the second case is more in line with the actual situation than the first case.
The third one is γ that is, the consumption in period t is a linear function of the weighted sum of all previous consumption (y (k) t−1 ), δ is the memory coefficient. And these three forms can be unified into the following forms: t for the k-th good (service) is divided into two parts: "physiological needs" γ (k) 0 and "psychological needs" ψ (k) y (k) t−1 ; physiological needs are the most basic and minimal needs of human beings, and the most basic consumption for human survival, and they have nothing to do with income, where ψ (k) represents the internal habit formation parameter of the k-th commodity and reflects the degree of influence of habit-forming stock on current consumption and y (k) t−1 is the habit-forming stock at period t − 1 of the k-th consumer product, which is the weighted average of consumption during past periods. If we substitute it into a utility function containing internal habits (in this case, the utility function is not just a function of the demand for various commodities during the current period, the internal habit stock y (k) t−1 also affects the utility level): In the above formula, β is the marginal budget share, which represents the allocation ratio of an additional unit of budget to various commodities. The utility function form here is proposed by L.R. Klein and H. Rubin in 1947. Here is a reference to these two practices.
The equation that maximizes the consumer's current utility under budget constraints is: Constructing the Lagrangian function at the boundary: The first-order condition for maximizing utility is: Given consumer income and the prices of various commodities, optimal demand can be obtained from: The above formula is solved from the above equations (line 267 and 268) and combined with the previous formula. Due to space limitations, the finishing process is omitted.
Multiplying p (k) on both sides of the above equation, V t represents the consumption expenditures of the first category of goods (services), yielding: Among them, α (k) 0 represents the consumer's total physiological demand for various types of commodities and µ (k) t reflects the habitual inventory of the consumption of the k-th category of commodities. To simplify the model, we assume that the habitual stock depends on the demand from the previous period, that is, δ = 0, thus, and the model can be simplified to: Representing the above model as a panel data model yields the following equation:

External Habit Formation Model
Assuming that the formation of external habits only affects basic needs and that the demonstration effect of consumption is lagging, the impact of consumer i on the demonstration effect of other consumers can be expressed as: where N is the total number of consumer groups, φ (k) ji represents the external habit formation parameter, reflecting the degree of influence of consumer j on consumer i. Since having too many parameters to be estimated will significantly reduce the degrees of freedom of the data, it is further assumed that other consumers have the same influence on consumer i. This yields: reflects the average impact of other consumers on consumers and q Similarly, the utility function containing external habits is optimized. We can obtain optimal demand as: it and multiply p (k) on both sides of the above equation, we can obtain the panel model form as: In summary, after integrating the internal and external habit formation theories into the panel ELES model, two meaningful conclusions can be drawn from the above constructed models, Models (1) and (2). The first point is that consumption demand can be divided into two parts: basic demand and supplementary demand. Supplementary demand is supplementary consumption after deducting basic demand from income. Basic demand is composed of "physiological demand" and "psychological demand". Parameter ψ (k) measures the internal habits of consumer spending, ϕ The second point is that physiological demand is not related to income level whereas psychological demand, which is related to previous consumption expenditures, is related to income level. The impact of internal habits on consumption expenditures has a time effect and the demonstration effect has an individual effect, which confirms empirical research on panel ELES models; other studies have found the results of time effects and individual effects. Third, Model (1) is a dynamic panel model. To avoid the problem of biased estimation of endogenous explanatory variables, the system generalized moment method model is used to estimate the dynamic panel model and the validity of the instrumental variables is tested using the Sargan test, which was proposed by Arellano and Bover [41] and Blundell and Bond [42]. Therefore, integrating the habit formation theory into the ELES model expands the theoretical connotations of the original model and partially explains the causes of the temporal and individual effects in the panel ELES model from the perspective of consumer behavior.

About the Data
The research data in this article were drawn from the rural consumption structure data regarding China's 31 provinces between 2002 and 2017 as compiled in the China Statistical Yearbook. We use different types of consumption expenditures to correspond urban residents in various provinces as model variables for rural residents. In this way, the panel data of the composition of the sample (N = 31 and T = 16) for this study were obtained. According to the current statistical caliber, various consumption expenditures of rural residents in China are divided into eight categories (M = 8): (1) food; (2) clothing; (3) household equipment, supplies and services; (4) medical care; (5) transportation and communication; (6) education, cultural and entertainment services; (7) housing; and (8) (1) and (2) as empirical models to examine the time effects of rural residents on various consumption expenditures and the differences in the demonstration effects of rural residents on the various consumption expenditures of different provinces.
where k is the type of consumption, I is the province and t is the year. V u and I u represent consumption expenditure and per capita disposable income of rural residents in the t-th province in year t, respectively.V i,t−1 represents rural residents' consumption expenditures during the last period and the corresponding coefficient ψ (k) reflects the formation of rural residents' internal habits. V i,t−11 represents the urban residents' consumption expenditures during the last period of the i-th province and φ (k) i reflects the external habit formation of rural residents' consumption, that is, the magnitude of the comparison effect.

The Empirical Results of Model (1)
Model (1) is a dynamic panel data model. To avoid the problem of biased estimation of endogenous explanatory variables, according to the work of Arellano and Bond (1991), the lag term before the t − 2 period of the V i,t−1 variable is a good Instrument variable. Therefore, in the estimation process of the eight models in this paper, V i,t−3 is used as an instrumental variable. The Sargan test is used to assess the validity of the instrumental variables. The estimated results obtained by the system generalized moment estimation model are shown in Table 1. It can be seen from Table 1 that the p-values of the Sargan test are relatively large and that the null hypothesis is accepted, which indicates that the assumption regarding the validity of the instrumental variable is accepted and that the estimation method is reasonable. In the estimation process for the (1) food and (8) miscellaneous models, the model individuals adopt the difference form and the p-value of the residual diagnosis indicates that the original hypothesis is accepted, that is, that the model does not have sequence correlation. Orthogonal deviation is used for individuals of the other models; the sequence correlation test of residuals is invalid. Finally, according to the recommendations of Naik and Moore [43], the time effect of internal habits formed in the fixed-effects estimation Model (1) is used (see Table 1) and the dynamic panel data model with a fixed time point is used in the estimation. The estimates of all models in this paper are obtained using Eviews8.0.
t−1 in psychological needs has nothing to do with the individual provinces, when we calculate psychological needs, this paper uses the average value of provincial rural residents' consumption expenditures in the year t−1 combined with the internal habit formation parameters ψ (k) and residents' marginal consumption propensity β (k) of different consumption types estimated in Table 1 to calculate the psychological demand effect for each year. Then, in Table 1                  It can be seen in Table 1 that, in most years, the time effect of consumption habit formation among the eight types of consumption expenditures of rural residents in China is significant, and that the physiological and psychological effects of all types of consumption expenditures are generally increasing. Figures 1-8 illustrate the following conclusions.
First, among the eight types of consumption expenditures, the psychological demand curve for residential consumption grew very rapidly. Over the past 10 years, the psychological demand of rural residents for residential consumption is higher than the physiological demand, which indicates that, regarding residential consumption, for rural residents in China the psychological sensory effects are more important than their physiological needs. In fact, this is consistent with reality. As the largest and most important consumption expenditure of rural residents in China, "living in a new house" in their lifetime is a goal of most rural residents. Rebuilding or expanding one's own house, even if one must save money and live frugally, is a true portrayal of many rural residents. Owning a house is also an important precondition for rural marriages. Therefore, the utility function of rural houses far exceeded the essence of living and endowed more psychological effects on rural residents.
Second, for the four types of consumption expenditures-food, household equipment, education and cultural services and medical care-the physical demands of rural residents in China are all greater than the psychological demand. The physiological de- It can be seen in Table 1 that the internal habit formation coefficients of various consumption expenditures of rural residents in China are positive and significant, that is, that there are significant internal habit formations in various consumption expenditures of rural residents in China, which indicates that rural residents in China experience a ratchet effect in expenditures. Among the eight items of consumption expenditures, the largest internal habit coefficient is for culture, education and transportation, and the smallest is for food, housing and miscellaneous items. In general, the internal habits of rural residents in China are relatively small in terms of survival consumption expenditures, followed by developmental consumption expenditures and the largest for enjoyment consumption expenditures. This demonstrates that, in recent years, as the income of rural residents in China increased, the proportion of rural residents' expenditures on food and housing gradually decreased, but expenditures on education, cultural entertainment and transportation significantly increased. In fact, with the recent emphasis on rural children's education, public education in rural areas of China no longer meets the educational needs of rural residents. Many rural residents can only meet their educational needs through means other than compulsory education. In addition, the consumption of cars by rural residents has increased significantly over recent years. These factors are the main reasons for the increase in rural residents' expenditures on education and transportation.
It can be seen in Table 1 that, in most years, the time effect of consumption habit formation among the eight types of consumption expenditures of rural residents in China is significant, and that the physiological and psychological effects of all types of consumption expenditures are generally increasing. Figures 1-8 illustrate the following conclusions.
First, among the eight types of consumption expenditures, the psychological demand curve for residential consumption grew very rapidly. Over the past 10 years, the psychological demand of rural residents for residential consumption is higher than the physiological demand, which indicates that, regarding residential consumption, for rural residents in China the psychological sensory effects are more important than their physiological needs. In fact, this is consistent with reality. As the largest and most important consumption expenditure of rural residents in China, "living in a new house" in their lifetime is a goal of most rural residents. Rebuilding or expanding one's own house, even if one must save money and live frugally, is a true portrayal of many rural residents. Owning a house is also an important precondition for rural marriages. Therefore, the utility function of rural houses far exceeded the essence of living and endowed more psychological effects on rural residents.
Second, for the four types of consumption expenditures-food, household equipment, education and cultural services and medical care-the physical demands of rural residents in China are all greater than the psychological demand. The physiological demand curve for these four types of consumption expenditure is steep and grows rapidly, and the psychological demand curve is relatively flat and the growth is slow. Over time, the distance between the physiological demand curve and the psychological demand curve becomes larger and larger. This indicates that rural residents in China are more "pragmatic" in these four types of consumption expenditures, focusing on the "use value" of commodities, which means that they pay more attention to the lowest level of commodities fulfilling their "physiological needs" and "security needs." These two demands feature the lowest level of commodity demand in terms of Maslow's theory.
Third, in terms of clothing, transportation, miscellaneous consumption and the other four types of expenditures, the psychological demand curve of rural residents in China has the following characteristics: it is relatively steep, the growth rate is rapid and over time, its distance from the physiological demand curve becomes smaller and smaller, perhaps even intersecting. Combined with the previous analysis of residential consumption expenditures, this demonstrates that, in terms of clothing, housing, transportation and miscellaneous consumption, rural residents in China not only pay attention to the "use value" of commodities but also the psychological value of commodities. That is, there is a higher level of demand for commodities that fulfill their "emotional needs", "respect needs" and "self-realization needs".
In fact, their consumption of clothing, living and transportation are all "extroverted" consumption expenditures; that is, the pros and cons of consumption is quickly known to others, which demonstrates that rural residents in China are more willing to be recognized by society through "extroverted" consumption.

The Empirical Results of Model (2)
Model (2) is a panel data model consisting of 31 individuals. We first determine whether the model is a variable intercept model or a variable parameter model and then estimate the parameters. Table 2 shows the results of the identification test for the existence of panel data model effects for eight categories of consumer expenditures. A, B and C represent, respectively, the sum of the squared residuals of the variable parameter model, the variable intercept model and the invariant parameter model. F 2 is the corresponding F-value of the test hypothesis as a constant parameter model (mixed model) and F1is the corresponding F-value of the test hypothesis as a variable intercept model (in the case of refusing the mixed model). If we take the significance level as 0.05, the critical values of the F-statistics F 1 and F 2 are: F 0.05 (60, 433) = 1.32, F 0.05 (30, 433) = 1.46. Combined with Table 2, for the eight types of consumption models, F 1 and F 2 are both significant, that is, Model (2) is a variable parameter model, which indicates that the external habits of rural residents in China have individual effects. Table 3 shows the estimated results of the panel model of the eight types of consumption expenditure models, Model (2). The intercept items of the three models for housing, household equipment and miscellaneous items are significant and the intercept items of the other models are not significant. The corresponding value of each province in Table 3 is the estimated value of parameter φ (k) i in model (2), which represents the magnitude of the comparison effect of each province in various consumption expenditures. It can be seen in Table 3 that the fit R 2 of the eight types of consumption expenditures is very high. The overall value of the equation obtained from the p-value of the F-test is very significant and there is no second-order autocorrelation in each equation.    Note: The software used is Eviews8.0, and ***, ** and * represent the significance levels of 1%, 5% and 10%, respectively. "-" indicates that the estimated value is not significant. The variable intercept of the food model is not significant, the intercept is weighted by the cross-section and the coefficient variance method is White; the variable intercept of the clothing model and the cultural and educational model is not significant, the intercept is weighted by the cross-section and the coefficient variance method is White diagonal; The intercept of the residence model and equipment model is significant, the intercept is weighted by cross section, the coefficient variance method is White diagonal; the intercept of the traffic model and the medical model is not significant, the intercept is not weighted, the coefficient variance method is White diagonal; miscellaneous The intercept of the model is significant, the intercept is weighted by cross section and the coefficient variance method uses White diagonal.
It can be seen in Table 3 that, overall, rural residents in most provinces of China have significant differences between the external habit formation coefficients for various types of consumption expenditures; that is, the comparison effect of rural residents in various types of consumption expenditures in most provinces exhibit regional differences. Among  Table 4 below.

Discussion
From the perspective of economic development and ecological resource protection, there is an important relationship between residential consumption and sustainable development. Consumption is an economic behavior that humans use to satisfy their own desires through consumer goods, consumption is divided into production consumption and personal consumption. As the economy develops and consumption increases, the earth's resources are decreasing. Many developing countries develop their economies in traditional models, that is, the economy of one-way material flow composed of "resourcesproducts-pollution discharge". In the process of production, processing and consumption, pollution and waste are discharged into the environment in large quantities. The use of resources is often extensive and one-off, so economic development, consumption growth and environmental protection are interdependent. To properly handle the relationship between consumption and sustainable development, for developing countries, solving environmental problems caused by consumption and economic development depends on development in the final analysis. However, economic development cannot be at the expense of the environment and cannot take the road of pollution first and then treatment. We must take the road of sustainable development and develop a circular economy. We should reduce and eliminate the production methods and consumption methods that cannot sustain development, so that the economy, society and environment can develop in harmony. Therefore, the conclusions of this paper are applicable to most developing countries.
By constructing a mathematical model, this paper effectively tests the time effects of Chinese rural residents' physiological needs and physiological needs in various consumer expenditure centers and examines the comparison effect of Chinese rural residents in various consumer expenditures in different regions. This shows that for the analysis of rural consumer behavior, the panel ELES model constructed in this paper within the formation of internal and external habits is practical and reliable. Since the model in this paper is a panel ELES model based on internal and external habit formation theory, utility function, basic demand theory and other theories, this model can be applied to the research of related residents' consumption behavior. For example, the model can be extended to study the comparison effect of consumption between different classes of society, as well as the changes in the psychological and physiological needs of various types of consumption expenditures between different classes. The future research direction of this paper is mainly to study the changes in the psychological and physiological needs of urban and rural residents of different income groups in various consumption expenditures, analyze whether different groups have a demonstration effect in various consumption expenditures, and analyze the differences in the demonstration effects of various types of consumption among different income groups.
The disadvantage of this article is that this paper fails to deduce the various consumption characteristics of rural residents in different regions in various consumption expenditures under the effect of habit formation, such as income elasticity, self-price elasticity, mutual price elasticity and the internal custom series and external custom series in different regions.

Conclusions
In this paper, by applying the internal and external habit formation theory, utility function, basic demand theory and a panel ELES model, we innovatively construct a panel ELES model containing internal and external habit formation theory that provides a way to examine the internal and external habit formation of the consumption structures of rural residents in China. Using new research concepts and methods, the derived panel ELES model redefines the meaning of "basic needs" and analyzes the mutual relationship between the "mental needs" and "physiological needs" of various types of consumption expenditures of rural residents in China during different time periods. From the spatial dimension, this paper analyzes the existence and dynamic evolution characteristics of the "comparison effect" between the various types of consumption expenditures of rural residents in different provinces of China. From the empirical results, this paper concludes the following.
First, there is a significant internal habit formation in various consumption expenditures of rural residents in China. Among the eight types of consumption expenditures, the one with the largest internal habit coefficient is culture, education and transportation, and the smallest is food, housing and miscellaneous. Generally speaking, the internal habits of rural residents in China are relatively small in terms of their subsistence consumption expenditures, followed by their developmental consumption expenditures and the internal parameters of their enjoyment consumption expenditures are the largest.
Second, for the four types of "inward-oriented" consumption expenditure typesnamely, food, household equipment, education and culture, and medical care-rural residents in China consider the "use value" of commodities, that is, the lowest level of commodities, that fulfills their" physiological needs" and "security needs". However, in the "extroverted" consumption of clothing, housing and transportation, in addition to the "use value" of the commodities, rural residents also hope to fulfill their "emotional needs", "respect needs" and "self-realization needs", that is, to obtain social recognition, through their expenditures.
Third, rural residents in most provinces of China have significant differences in the external habit formation coefficients for various types of expenditures. That is, in most provinces, the comparison effect on the various expenditures of rural residents exhibits regional differences. In general, rural residents in China are most affected by the comparison effect on cultural, educational, residential and transportation consumption expenditures. The comparison effect of household equipment and miscellaneous consumption expenditures is not significant in most provinces.
Fourth, rural residents in economically developed coastal areas are most affected by the comparison effect in terms of their food and housing consumption expenditures, while clothing, transportation and education and culture expenditures are the least affected by the comparison effect. Consumption expenditures on culture and education in the three northeastern provinces are most affected by the comparison effect. The western and central provinces exhibit the largest and the smallest comparison effects on household equipment and medical consumption expenditures, respectively.
In summary, the time effects of physiological and psychological needs among the eight types of consumption expenditures of rural residents in China are very obvious and the comparison effects of various regions are significantly different. The reason for this is that we believe that with the development of Chinese rural economy and the increase in income levels, changes in the items and structure of rural residents' consumption expenditures have caused changes in rural residents' consumer psychology, which has led to the existence of rural residents in various commodity expenditures. This is the main reason for the time effect. In addition, from the perspective of economics, the "comparison effect" is a fashionconscious mind, and it is no exception for rural residents in China. As the basic needs of rural residents are satisfied, the differences among income levels, customs and regional consumption habits of rural residents in different regions, differences in family background and other aspects have made the "vanity" and "comparable with each other" more obvious, which is another main reason for the differences in regional comparison effects.
The most prominent contribution of this paper is that by constructing a panel ELES model that includes the formation of internal and external habits, the time effect of the psychological and physiological needs of Chinese rural residents in various commodity consumption expenditures is decomposed, and the various types of rural residents in different regions of China Regional differences in the comparison effect in commodity expenditures. The above contributions are of great significance to decision makers. First, through the time effects of the psychological and physiological needs of various commodities, we can formulate more detailed consumption policies for different commodities in rural China; second, through the regional differences of the comparison effect, we can formulate more personalized regional consumption policy. This has important practical significance for tapping the consumption potential of rural residents, improving consumption levels in rural areas, promoting consumption growth in rural areas and enhancing the fundamental role of consumption in economic development.
This article also has shortcomings. This article fails to deduce the various consumption characteristics of rural residents in different regions in various consumption expenditures, such as income elasticity, self-price elasticity, mutual price elasticity and different regional internal custom series and external custom series.
The future research direction is about the research of the changes in the psychological and physiological needs of urban and rural residents of different income groups in various consumption expenditures, analysis about whether different groups have a demonstration effect in various consumption expenditures, and the analysis about the differences in demonstration effects of various types of consumption of different income groups. Data Availability Statement: All the data used in this article can be found in the China Statistical Yearbook.

Conflicts of Interest:
The authors declare no conflict of interest.