The Empirical Research On The Effect Of The Urban-rural Residents’ Income Gap, Uncertainty On The Residents’ Consumption

Residents’ consumption is not only the ultimate goal and end-result in acountry’s economic production, but it can also stay the economic developmentsustainably as a persistent power. Since the reform and open policy was carriedout, China’s economic growth has been driven by foreign trade and investment, butthe consumption as the one of the force of pulling the economic development has beenin a recession, staying out strong enough. Meanwhile, the expanding of urban-ruralresidents’ income gap and some relevant marketization institutional reform hasbrought some uncertainties to residents’ consumption environment in our country,which has an effect on the increase of residents’ consumption demand. Therefore, on abasis of current theory condition and the reality, this paper which uses the theory ofincome distribution and precautionary savings to research the residential consumptiondemand has an important theoretical value and practical significance in our country.Based on the background of the reform and open policy, in the first place, itanalyses the theoretical mechanism in the influence of the urban-rural residents’income gap and uncertainties on the residents’ consumption demand, then lists theactual situation that is the expanding of the income gap between the urban and ruralresidents, the residential consumption environmental uncertainties and the source ofuncertainty factors and realities of the residential consumption demand. Secondly on abasis of Weil (1993) consumption model, we have established precautionary savingsmodel, which includes the factors of consumers’ habits and uncertainties. Then,combining with China’s reality, we obtained a econometric model of the residentialconsumption demand, which is affected by the urban-rural residents’ income gap anduncertainty factors. Thirdly,using the general system moment estimation method, wecarry on empirical test from the national and regional levels, and get the followingconclusion: firstly, from the national level, it shows that the expanding of income gapbetween urban and rural residents in our country can’t stimulate our consumers’demand; uncertainties can obviously more significantly inhibit the consumptiondemand expansion, and the house prices produces the negative effects on theconsumption of residents in our country, and so does employment fluctuation, but theincrease of the education and medical expenses can stimulate consumption demand,secondly, from the regional level, it shows that the expansion of income gap between the urban and rural residents has a decreasing negative effects among the middle, east,west regions gradually;house prices, the educational and medical expenses andemployment fluctuation also have a certain degree of difference on the three regions.Last but not the least, according to how to twist the expanding trend of the residents’income gap between urban and rural regions and uncertainties in the consumptionenvironment, this paper puts forward the corresponding policy suggestions.