Effects Of Income Distribution On Consumer Demand Of Chinese Urban Household

The relation between the income distribution and the consuming demand has been the subject for research that the scholars of economical and financial circles are interested in all the time. Especially since the reform and opening-up, China economy has been growing at the top speed, people income level raise by a wide margin, at the same time it comes a great of effects which mainly from two sides:on the one side the city inhabitant's income distribution is more and more big, on the other side, recently our country effective demand especially consumer demand continuously malaise, year final consumption rate is still lower. Then whether or not income differential will have influence on the expense demand, how about the impact level? This is a very question deserve to research.In this article we studying about the relation of our country income distribution and consuming demand from two parts of theory and empirical. In order to study theirs relationship from theory, firstly need to define the concept of income distribution and consuming demand, and then use classical consumption theory of the west to analysis income distribution affect consuming demand's specific means:income distribution will through declining average consumption tendency, increasing savings and liquidity constraints, increasing legacy motive and so on to affect consumer demand. By describing measurements of income distribution and with our country income distribution and consuming demand's current situation, we found that our country urban residents'Gini coefficient on the rise, it means income distribution is widening, but consuming demand always at a weak situation in recent years. It can be noted that the study on the theory and measurement aspects of the income distribution theory of the west tends to prove the existence of income distribution effects, i.e. income have an impact on consumer demand, and equation measures in income distribution helps boost consuming demand. However, do all these discussions based on the consuming features of the western countries function in China as well? Through the measurement analysis on the basis of China's real situations along with the model analysis, this paper reaches the conclusion as follows:a. In terms of the impact income distribution has on consuming demand, peripheral consuming tendency is income decrease function, i.e. high-income class exhibits a low tendency towards peripheral consuming while low-income class shows a high tendency. As a result, redistribution of income between high-income class and low-income class is capable of enhancing peripheral consuming tendency of the whole society.b. In terms of the scale of impact income distribution effect on consuming demand, there is a self-evident and appreciable reverse relationship between income distribution gap among China's rural and urban residents and the rural and urban consuming demands disclosed by a detailed analysis of China's rural and urban residents.Finally, I summarize briefly to this text and bring forward some recommend. We need to improve residents'income level, by narrowing the income gap between income redistribution policies, improve the social security system reduces the uncertainty of future and so on to raise current consuming demand.