The Economic Analysis Of The Impact Of Our Country's Cities And Towns Household Income Distribution On Consumption Demand

Since the reform and opening-up, China economy has been growing at top speed , people per capita income level raise by a wide margin overall, and people's lives quality can bring the well-to-do level up to while being food and clothing still. But resident's income gap has been presenting the extended trend all the time in the course of our country's economic reform and development .The increasing degree of consumption expenditure of resident of our country had obviously dropped since 1990s.Observing on long terms, the average propensity to consume of residents of our country, namely the proportion of taking gross domestic product of total consumption of resident keeps reducing. The rate of resident consumption in our country has been on the low side for a long time. The government, in order to stimulate consumption , implement many kinds of countermeasures of expanding domestic demand, but national consumption is still difficult by standing up vigorously slowly. So studying about the relation of our country urban residents income gap expand and consumption in low spirits have important theory meaning and realistic subject of meaning.Beginning with studying the change trend during economic transition course, this text plans to explore the impact of urban resident's income gap in our country on consumption demand from two respects of theory and empirical research, proposes concrete measure of rationally regulating the income distribution and expanding the aggregate demand.The personal income gap refers to the difference of the income quantity that people obtain during a specified period, it has a difference of absolute income gap and relative income gap. The absolute income gap is expressed with the monetary unit or other material objects index, relative income gap is shown with the proportion of the income or the relative share. Absolute income gap and relative income gap have both connection and difference, which can be regarded as the index of weighing the personal income gap. The following several measurement index of the personal income gap mainly: Lorentz curve, Gini coefficient, a stupid inferior index, Kuznets index, bad index, etc. Compared with most developing countries, the unequality degree of China's income distribution is in a middle position, the Gini coefficient of China is obviously lower than Africa and some countries of South America, but slightly higher than other Asia countries (World Bank, 1996). Compared with India who have the same of people's scale, the region and development level as china, and watching from five income proportion that grade divide into groups, disparity of income distribution, China is heavier than that of India, though the rich persons of China are not so rich as the rich persons of India, the poor persons of China are poorer than the poor persons of India. Examining four evaluation indexes using income distribution, according to Huang yantai and Wang jiangui: Gini coefficient, A stupid inferior index, Kuznets index, bad index, Buddhist nun of tile, carrying on K-the fast cluster of mean value to 90 income distribution state of country, the result shows China's income gap is above the medium-size level in the world.The variation tendency of the income distribution state of urban residents of our country, embody in mainly: Overall income gaps of urban residents are expanded year by year; The gap between rich and poor among the urban residents families is aggravated day by day; Worker's income gap is expanded further among the urban trades; The regional disparity of the urban residents income is expanded. In the course of Chinese economic transition, reasons why the income gaps of urban residents of our country expand are in many aspects. The normal reason urban residents magnify income: Namely the function of economic development; Function of economic reform; Function of the government policy. The non-normal reason urban residents magnify income includes: Seek the activity of renting monopolize behavior, system defect, etc.Consumptive characteristics of the urban residents of our country, mainly shows in the following aspects: the average propensity to consume of the consuming groups with low- and medium-level income is higher than the consuming groups of the high income; The consumption intension and composition of different consuming groups are different; The life styles of the consuming groups with low- and medium-level income are restricted by the "the income determines to consume", the life style of high income consuming groups turns from traditional "income determine consuming" to "time determining consuming" and The per capita income of the different incomes group of urban residents is different from increasing degree of consumption.Income distribution disparity too big means setting social gross income to go on distribution that polarize among social member again. The result of this kind of distribution must cause the poor's propensity to consume to relatively improve because of being badly paid, propensity to consume of the rich drop because of being well paid, shown as the poor want to consume but have no money that increases consumption, and the rich are satisfied with the level of consumption under the condition, no longer consume further, stand up money deposit instead(whether propensity to save rise), used in other productive consumption non- simply, thus cause total resident's propensity to consume to drop, cause the total consumption demand level to drop finally.The above analysis informs us of the income distribution and consumption features in China's economic reform as well as a wider income gap among the rural and urban residents in China with a declining tendency for consuming demand. 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 exerts an impact on consuming 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 exerts on consuming demand, there is an 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.So, in order to start the consumption demand, the government must change the situation that the income gap is too big, raise the income level of the low income colony, narrow the disparity between it and high income colony properly.Two basic principles which should be held in resident's income gap macro adjustments and controls: Recommend reasonable regulation and control income gap. It does not mean advertising equalitarianism, blowing the average wind. For allowing first rich as well as narrowing the gap to make balance, we do not limit getting rich income first to make everybody march, but should take the positive attitude to dispel the unreasonable income gap, so that personal income distribution is controlled in the range that can be accepted in various fields. Reasonable regulation and control goal of income gap is to standardize income distribution, increase the transparency of the source of revenue, reflect that distributes according to work and distributes the principle that combine together in factor of production, make the distribution structure of the income tend towards rationally, reduce the artificial disequilibrium, give play to assign the intermediary, lubricates and catalysis among production and consumption. Second, we should not hold advanced person back, but make the disparity between advanced person and the less advanced shrink, not contradictory between the two. We already should pay attention to it on the crosswise than the absolute magnitude of the disparity change, pay attention to it on being vertical than relative quantity, disparity of change even more. If economic development total amount increase very fast, on this basis, the speed of vertical income level of the less advanced person is higher than that of advanced person, the income gap can shrink.I can adopt the following countermeasure while thinking the income distribution of regulation and control of our country, expanding the consumption demand: 1, Strengthen the lever regulation and control of resident's income distribution of the tax revenue, stabilize and supervising on function; 2, Set up and perfect the social security system which accord with the China's actual conditions; 3, Take various kinds of measures, raise the income level of the urban low income colony, including increase the social welfare direct to the urban population below the poverty line to help, the employment opportunity of the person who increases urban low income, increase the input into education of the low-income group etc.; 4, Strengthen the law and administrative penalty dynamics, prevent the personal income gap from expanding normally; 5, To different income colonies, implement different consumption and ensure and guide the policy, improve consuming rate ,etc.Finally, I summarize briefly to this text, propose looking into the distance. Urban income distribution disparity has important influence on the total consumption demand. Though total consumption demand has very great relations with income distribution, the settlement of the problem must not be confined to the income distribution field. Income distribution is not the only factor of working. Author in the course of studying find Chinese urban residents consumer behavior might have relation with economic transition course revenue and expenditure uncertainty that residents face also, such factors as the mobility restraint that the financial market receives etc. but limited to my ability and space of the article, this text has not done concrete research, while hoping in the study in the future and studying, and then do deep research and discussion to these respects.