The Research On The Impact Of Urbanization Affecting Consumer Demand

Through more than three decades of reform and opening up, shandong province hasentered a stage of sustainable development as well as the problem of insufficientconsumption emerged. Urbanization of the population in Shandong which had beenlagged became the significant reason. Article I of central government Increasing Urbanand rural development to further consolidating the basis of agricultural and rural in2010explicitly showed the urgent need of stimulating consumption, especially the consumptionof residents.2011and2012Government Report of the People’s Government ofShandong Province reflected shandong government’s determinations as well. Operatingfocused on stimulating consumption either. In this paper, a combination of a normativeanalysis, statistical analysis, empirical analysis which served population and economic dataof Shandong province during the period1978-2010analyzed the level of urbanization ofthe population and consuming demand in Shandong Province.In the section of normative analysis, the article carding theory of urbanization of thepopulation and theory of consumption then analyzed the influence of urbanization of thepopulation effecting consuming demand. Research found two sets of effect, income andsubstitution effect of urbanization of the population effecting consumption, demonstrationand ratchet effect of urbanization of the population effecting consuming demand. Foreach set, the former effect is greater than the later. As above, the level of urbanization ofthe population positively impacts consuming demand.In the statistical analysis section, the article analyzed the urbanization of populationand consuming demand in Shandong. The result shows that the level of urbanization ofpopulation is low overall, urban and rural development is out of balance, urbanization ofpopulation lags behind the growth of total economic output, final consumption rate, therate of household consumption, final consumption average annual growth rate of residentsin Shandong Province has continued to decline.In the empirical analysis section, the article selected the non-agricultural populationproportion during1978-2010which represents urbanization of population, simultaneouslythe total social retail consumption which represents consuming demand. Vectorauto-regressive model and the impulse response function are applied to the trends researchof urbanization of population and consuming demand. The consequence is the level ofurbanization of population and consuming demand present marked positive relationshipwhich recognizes speeding up rational urban constructions plays decisive role in accelerating consuming demand.According to the conclusion, reform of household registration system, social securitysystem and farmers’ land system is suggested to fasten construction of small urban andtown, strengthen urban infrastructure and adjust the industrial structure so as to enhancelevel of consumption by accelerating urbanization of population of Shandong.