The Research Of How The Rural Residents’ Income Structure Influences Its Consumption In China

It has been more than thirty years since the Reform and Opening, rural residents’income of our country has been showing a rapid development, but the development ofrural consumption is very slow. Expanding rural consumption as an important part ofChina’s policies of stimulating domestic demand, has been highly valued by the partyand government. With series of measures to stimulate rural consumption around thewhole country, rural consumption has improved a lot, however, the unreasonableincome and consumption structure of rural residents makes it hard to fundamentallysolve the problem of low rural consumption. Thus, the study of how the ruralresidents’ income affects consumption becomes an very important topic,it is also ofgreat significance to expand rural consumption.This paper is based on the summary about the study on the relationship betweenincome structure and consumption, firstly, we point out the problem of rural residents’consumption in China. Then based on the ELES model, we analyze Chinese ruralresidents’average propensity and basic demand on eight types of consumer goods andhow much the basic demand of consumer spending account for of real-life. Throughthe empirical study, we know that the income structure of rural residents is animportant factor influencing the consumption. Meanwhile, the current consumptionstructure of rural residents is not in favor of the consumption growth, theinfrastructure of the rural consumption market is not perfect; these are the reasonswhy rural consumption is difficult to expand.Overall, the income structure of Chinese rural residents has a very large effect onconsumption, how to adjust the income structure of rural residents to expandconsumption in rural areas becomes an important issue to solve the insufficientdomestic demand problem. In this paper, we put forward the correspondingcountermeasures and suggestions from the aspects of increasing farmers’ income,optimizing the consumption structure of rural residents, improving the rural socialsecurity system and the rural consumption market.