Study On Consumption Changes Of Rural Household In China To Expand Domestic Demand

As one of the troika pulling economic growth, consumption played an important role in national economy. Since the late 1990 years, expanding domestic demand had become the orientation and objective of macroeconomic control. Among them, expanding rural demand, especially rural consumption demand, was significant for pulling domestic demand and solving the"three rural"issues, which had been given increasing concern by the government and the theoretical circles.Based on the theory of consumption economy and using methods of empirical analysis and comparative analysis, this thesis had analyzed changes trendency and characteristics of consumption demand,consumption level,consumption structure,consumption market of rural household in China since the market economic established, and conducted quantitative and qualitative analysis on factors affecting consumption behavior of rural household with a view to provide theoretical support for promoting consumption demand of rural household.Main research contents and achievements were as follows:1. Identify consumption behavior of rural household as the study object, define consumption,rural household,rural household consumption and other related concepts, and laid the theoretical basis for consumer behavior research respectively from perspectives of consumption patterns,marginal utility and consumer choice,consumption function.2. Study on changes trendency of rural household consumption demand and its relationship with economic growth, as well as comparing the pulling effect of components of GDP by expenditure approach. Judging from the degree of adaptation of rural household consumption to economic growth, rural household in China lagged slightly in consumption patterns from 1992 to 2008. Rural household consumption expenditures gradually increased except for a few years, but rural household consumption rate dropped almost every year. Rural household consumption had not played an important influence to GDP growth after 1997, and urban household consumption expenditures and Gross Capital Formation had been important.Construct rural household's macro-consumption function and examine it, finding that lagged per capita consumption expenditure of rural household had an stronger effect on currect per capita consumption expenditure of rural household than currect per capita GDP, and rural household consumption behavior were of strong inertia. The equilibrium relationship in long run between the per capita GDP and per capita consumption expenditure of rural household had strong constraint on short fluctuation of per capita consumption expenditure of rural household, and short-term per capita consumption expenditure of rural household would adjust according to the long-run equilibrium relationship continuously.3. Reveal changes trendency and characteristics of consumption level and consumption structure of rural household, and analyze features of consumption structure of rural household through ELES demand function model. The overall level of rural household consumption had been rising, and had entered into overall well-off stage nowadays from early 1990s'food and clothing stage. Consumption expenditure structure of rural household in general continued to be optimized. The proportion of food,clothing,household facilities articles and services had dropped, and that of residence,transport and communications had increased; The rank of transport and communications in the sequence rose significantly. From 1993 to 2008, the item that had changed the most frequent was transport and communications, and the years in which consumption expenditure structure of rural household had changed most actively was 2000-2003.In general, income gap between urban and rural households beacame bigger; Consumption expenditure structure sequence of urban household changed more frequently than rural household; the item which rose fastest was also transport and communications, followed by health care and medical services. The proportion of food and residence of rural household was significantly higher than that of urban households. Intra-rural income gap between different income-groups expanded; the items which had most apparent expenditure gap were transport and communications and residence. As income levels increased, the proporition of total of food,clothing and residence got downward, and that of transport and communications,education cultural and recreation and services and healthe care and medical services got upward. Income and consumption gaps between different regions had narrowed. The proporition of expenditure on residence and transport and communications of rural household in eastern region was higher than that in other areas; the proporition of health care and medicine services and clothing in northeast region was higher, and the proporition of household facilities articles and services was lower; the proporition of food in central and western regions were higher than that in eastern and northeast regions.Cross-section ELES analysis showed that the MPC of urban household in other six items were higher than rural households except for food and residence in 2008. The MPC of food,education cultural and recreation and sevices and miscellaneous goods and services of rural household in 2008 were lower than in 2002. Expenditure for the basic needs of rural household in 2008 was 2534.84 yuan, which was 390.06 yuan higher than low income household's real consumption expenditure; Expenditure for the basic needs of urbal household was 4940.16 yuan, which was 1.95 times rural household. In 2008, the income elasticity of all goods and services of urban household was higher than that of rural household except for residence; the price elasticity of all goods and services of urban household was higher than rural household's, and rural household was more sensitive to price changes of residence and transport and communications. Changes in food price of urban and rural household made greast impact on seven other categories'demand. The result of time-series 2ELES analysis showed that the MPC of rural household was highest in 1993-1996(Ⅰ)phase, followed by 2005-2008(Ⅲ)phase, and 1997-2004(Ⅱ)phase was lowest.4. Analyze changes trendency and characteristics of rural market, and conduct a special research on durable consumer goods, as well as evaluate"household electrical appliances to the countryside"policy. Seeing from retail sales and its growth of urban and rural consumer goods, the proportion of retail sales of consumer goods in city was expanding and that in county and under county level was shrinking, particularly under county level. Urban and rural consumer goods market developed unbalanced and the gap was widening.Rural household's demand for color TV sets,washing machines,motorcycles,refrigerators and other traditional durable goods would gradually been met, and air-conditioner,computers,smoke machines,water heaters and other advanced durable goods was expected to become hot spots in next several years. Inter-regional and regional disparities in quantities of durable consumer goods were obvious, and variation in development stadge and upgrade degree was also significant. Regional difference of living habits and consumption environment made regions with the same level of income and consumption prefered differently. In addition to the absolute level of per capita net income, its growth rate was also an important factor affecting rural households'demand for durable consumer goods."Household electrical appliances to the countryside"would play a role in consumption promotion of that part of rural household who was being rich,had some savings and purchasing power and was ready to buy household electrical appliances. So this policy would eventually be constrained by income levels of rural household. Therefore, while encouraging consumption of rural household, their income should be improved effectively, particularly those low-income household. In the process of implementing the policy, supervision should be strengthened to prevent fake and shoddy procucts taking the opportunity to enter rural market and ensure the subsidies fall into the hands of rural household.5. Construct rural household consumption function model, and analyze the relationship between consumption and income,liquidity constraints,uncertainties and other factors of rural household. While verifying the view of consumption mainly depending on permanent income, this chapter showed that the impact on rural household's consumption made by permanent income and temporary income may vary at different phases. Permanent income elasticity was 0.911 in 1985-1996 and 0.890 in 1997-2008; the MPC of permanent income was 0.912 in 1985-1996 and 0.725 in 1997-2008. In the period of income growing slower, the MPC and income elasticity of permanent income both declined. In theλhypothesis testing, rural household consumption was sensitive to the current income. This excess sensitivity was mainly due to liquidity constraints, and fluctuations in agricultural income arising from market risk had no significant effect on rural household consumption.Policy implication was to promote the income of rural household, especially permanent income to grow stably. Stabilize income expectation of rural household, and reform rural financial service system to ease the liquidity constraints of rural household; Share various uncertainties that faced rural household, including fluctuations in income and expenditure resulting from natural risks,market risks and social risks.6. Analyze the effect that public goods,market system,product structure and other factors played on rural household consumption, and make the factors not included in rural household consumption function drawn into the scope of this chapter. Thinking that roads,electricity,communications and other production and living infrastructure would drive consumption demand of rural household by improving rural environment and relaxing consumption constraints.Education and medicine service expenditure would lay physical and intellectual foundation for rural household to obtain higher income in the future. Social security affected the consumption behavior of rural household mainly from two paths: one was increasing rural household's income through social security expenditure; the other was stabilizing income and expenditure expectation of rural household through building a sound social security system.Improved transport and communications infrastructure and developed commercial networks played a significant role in promoting rural household consumption. Strengthing rural market supervision and rectifying rural market order could promote the development of rural consumer goods market and reduce the purchase cost of rural household. Products supply of manufacturers, mainly the products structure, was also an important factor affecting consumption behavior of rural household.7. Explore and propose ideas and measures of promoting rural household consumption and expanding rural consumption market. Proposing that establishing the long-term mechanism and system security of increasing rural household income sustainedly was the fundamental policy. At the same time of increasing rural household income steadly, we must reform rural fianscial service system and share risks of rural household to ease liquidity constraints and uncertainties.In the short term, the implement of technical policies and measures was the focus of expandinig rural consumption demand, such as constructing rural infrastructure and market system,guiding enterprises to develop rural market and produce marketable products and so on; The purpose was to protect potential demand to transform into real demand smoothly by improving rural supplementary facilities and perfecting rural consumption environment.