The Analysis To Rural Residents Consumption And Its Effecting Fctor

This paper makes use of consumption and economic theory and the analysis method ofquantitative to study the change character, the rule and the effecting factor of consumerbehavior of rural households in China in order to acquire the useful studying outcome tosupplying theory and policy base for developing rural consumption market.Consumption plays an important part in economic development, this can be seen fromthe following area: the first is that consumption has a direct and indirect pull effects; thesecond is that consumption can create the human resource that is needed by productiondevelopment, thereby improve productive force; the third is that consumption also plays therole of an automatic regulator to prevent nation economy from fluctuation in a large scale inthe view of balance.The consumption level of rural residents is increase in volatility than can be verifiedfrom the changing of the average propensity to consume and Engel coefficient, and from theconsumption change of physical and labor, and from the improvement of the quality of lifeand health in the rural residents。We can also find that the model of the rural residentsconsumption belongs to the lagging model from the comparing of the consumption level ofthe rural residents and the increasing of GDP in a series of years, and this model have benefitsin the early stage of economy development, though we should change this laggingconsumption model into the synchronization consumption model as soon as possible with thedevelopment of economy, and make the consumption model in line with the development ofeconomy to promote the virtuous cycle of consumption and economy.The consumption structure of rural residents can be made an obvious improvement fromthe view of vertical , that are follows as: the basic consumption proportion have a largechange, and the order in the general expenditure are back; the consumption structure arechanging into development and enjoyment from survive, and the proportion of theself-sufficiency goods decrease and the proportion of the monetary consumption increase, theconsumption in spiritual life increase, and the consumption in material life decline. From thehorizontal view, the consumption structure of the rural residents have a great difference: thefirst is that the gap in the consumption level and the purchase power and the consumptionstructure from the different income groups of the rural residents, but the difference in the expenditure of household appliances and services are not as obvious as the consumption ofother category goods。The second is that the difference in the consumption of householdappliances, services, foods, and communication and transportation is some large between theurban residents and the rural residents。The third is that the difference in the respect ofconsumption level and structure is very small in the sides of eastern, central and western ruralresidents。In a general, the consumption level are gradually improvement, the consumptionstructure acquire an obvious increase and are evolving towards the multi-level, different andindividuation, and the consumption of rural resident are changing from the stage of dressingwarmly and eating fully to comfortably well-off.Finally we take the ELES model using time series and cross-section data to analysis theconsumption demand structure of the urban residents and rural residents in order tounderstand the effect of the consumption, basic consumption, income change and pricefluctuation between the rural residents and urban residents.The analysis result of time series data (1993～2006) shows that: firstly, the long-timemarginal propensity to consume (MPC) of the rural residents is bigger than the urbanresidents。In detail, the MPC of rural residents are bigger than urban residents in the respectsof food, housing, healthy, household appliances and transportation and communication, andsmaller in the respects of clothing and education and entertainments。second, the incomeelasticity of demand of the rural residents in such goods as food, clothing , householdappliances, education and entertainment, house and others are bigger than the urbanresidents, furthermore, the income elasticity of demand of the rural residents in such goodsare bigger than 1 that shows that the demand of rural residents to those goods are bloom andthese goods are going to become consumption hotspot.The analysis to cross-section data (2006)shows that: Firstly, the MPC of urban residentsis 0.620, smaller than long-term MPC, classification from the consumption kinds, MPC ofrural residents can be ranged as food, transportation, education and entertainment, housing,clothing , house appliances, healthy and others according with big or small of MPC, we canalso find that the MPC of house appliance and health of urban residents obviously lower thanother items。Secondly, the basic consumption expenditure of urban residents in 2006 is3543.12Yuan, and the disposable income of the poorest urban residents is lower than3543.12Yuan, showed that the residents of this group need be aided。The result also showsthat the expenditure in the respects of food, clothing, housing, education and entertainmentand health are rigidity to urban residents。Thirdly, the basic consumption expenditure of ruralresidents in 2006 is 1974.48Yuan, and the rural residents whose consumption are lower thanthis standard are poor residents, the result that the standard of rural residents is much lower than the standard of urban residents shows that the gap between urban and rural is very large。Fourthly, the MPC of rural residents is 0.5016 that is lower than the MPC of urban residents atthe same time, the MPC of eight kinds of consumption goods to rural residents are ranked asfood, housing, transportation and communication, education and entertainment, healthy,clothing , household appliance and other else from high to low, it should be concerned to theMPC of household appliance of rural residents that shows that the difficult to developingindustrial goods market of rural is bigger in the circumstances of constraints income andsystem。Fifthly, the analysis to the income elasticity of demand of the rural residents showsthat the income elasticity in the respects of transportation and communication, housing,household appliance and education and entertainment are bigger than the income elasticity offood and clothing, in addition , it is worth of note that the income elasticity of housing ofrural residents is bigger than urban residents that reflected that the preference to housinginvestment of rural residents are not changed. Sixthly, the analysis to the price elasticity ofurban and rural residents showed that the response of rural residents to the price of the majorkinds of commodity are bigger than the rural residents, but smaller in the kinds of housing,food and healthy care, and the results also showed that the response of rural residents isstronger to the price change of transportation and communication, housing, education andentertainment and household appliance。Seventhly, the analysis to the cross price elasticity ofurban and rural residents shows that the price change of food have a large effect to thedemand of other kinds of commodity, and explained that the stabilization of food is veryimportant to improving the living standard.In order to further study the effect of income to consumption to rural residents, this paperuse modern economic theory and many model to analyze the relationship of per capitaconsumption and per capita income to China rural residents from the angle of durable incomeand temporary income, static and dynamic。We can find that: Firstly, there are a long-termbalance relationship between the consumption and income to rural residents, and there are ahigh degree of relative between them。Secondly, the income factor have an important effect tothe consume expenditure to rural residents, comparing with that, the effect of other factors ismuch smaller, therefore vigorously developing economy to increase the income of ruralresidents, in particular the income of lower rank can bring the pull effect of consumption toeconomy into play in a large extent。Thirdly, the important factor that make a large effect toconsumption of rural residents is the durable income but not temporary income, although, theeffect of temporary income are becoming more and more large in a long term.Fourthly, theprincipal factor that affect the improvement of consumption of rural residents is not absoluteincome level but the growth of income, therefore, maintaining the perpetual increase of rural residents income are the main factor in improving the increase of rural residentsconsumption。Fifthly, there are significant difference in the consumption structure whichvaries with the time at different term, before and past 1990, the MPC and consumptionelasticity of rural residents have a obvious decline trend which is caused by the phenomenonthat rural residents in China have not established a good social security system, and theuncertainty of rural residents to the income and expenditure in the future make them takingamount of income to saving to avoid rainy day.In order to comprehensively and objectively assess and calculate the effects of liquidityconstraints and uncertainty to consumption behavior of rural residents in China, at thepremise of deeply analyzing the mechanism of precautionary saving at first, discuss the resultof introducing liquidity constraints into uncertainty circumstance, and demonstrate theenhance role of liquidity constraints to precautionary saving in the respect of math, andpresent a furthermore verification to this proposition with the use of the data of rural residentconsumption in China。The result shows that: Liquidity constraints have obviousstrengthening effect to the precautionary motive of rural residents in China。At present, theproblem of the high growth of saving and consumption slump in the rural area in China aremore likely concerned with the effect of liquidity constraints and uncertainty that is facedwith the rural residents。Then at the base of thinking of the stable of the data, this paperestimated the error correction model (ECM) of rural residents consumption at the condition ofconsidering liquidity constraints and uncertainty, in the course of calculation, in order toexplain question more objectively and comprehensively, we estimated every model withmulti-group variance and compared and analyzed every result。The result shows that: Firstly,the uncertainty and the precaution motive of utility function commonly decide the behavior ofprecaution saving, and liquidity constraints lead the increase of precaution saving throughstrengthening the precaution motive of consumer, and this strengthening effect are moreobvious in rural residents than in urban residents。Secondly, since the reform, both the ruralresidents and the urban residents' consumption behavior is effected by the stronger liquidityconstraints and uncertainty factors, in a lot of cases, interest has a weak and negative impactto the consumption whether to rural residents or urban residents。Thirdly, estimation showthat the extent of liquidity constraint faced by urban residents are higher than the ruralresidents, but the response of rural residents to uncertainty are more sensitive than urbanresidents, not only that but also the sensitive degree of rural residents consumption respondingto the change of interest, and the long term income elasticity of per final consumption of ruralresidents is lower than the long term income elasticity of per final consumption of ruralresidents in a whole. The impact of system factor to the rural residents consumption are very big, this papermainly analyze the impact of system to consumption from the angle of urbanization and thesupply system of rural public goods。The quality analysis shows that urbanization has theallocation effect of income, consumption and resource, and the quantitative analysis showsthat urbanization of rural has a positive significance to increasing rural residents consumption.The insufficient of rural public goods supply have brought many negative effect, and it notonly effects the continuous development of rural residents income and add the burden of ruralresident but also restrict the demand to many durable commodity directly.Starting the rural consume market has very important economic significance。This paperpresented many measures to enliven rural consume market such as: how to improve theincome of rural residents and promoting rural financial system reform and improve the ruralsocial security system and accelerate the process of urbanization, rural public innovativeproducts supply system, and actively nurture the rural market and so on.