Research On The Impact Of Income Distribution Gap On Rural Residents’ Consumption Demand In China

In 1990 s, China began the market-oriented economy system reform, and market-oriented economy began to launch comprehensively in China. With the continuous improvement of the reform of market-oriented economy system, our economy always keeps the high-speed development and makes acclaimed achievement. Chinese Party Central Committee and The State Council pointed out in Central Economy Work Conference Report in 2015 that the contribution rate of the final rate of consumption in first three quarters of 2014 had reached 48.5%, which exceeded the investment and became the first great motive force to promote economic growth. However, as our market-oriented economy reform enters into the key stage, gap of national income distribution widens and residents’ consumption demand drops continuously. How to narrow the income distribution gap and increase residents’ consumption demand becomes the vital problem which restricts our economic development. Moreover, our country is a great agricultural country; rural residents are in the absolute ascendance on population.By combining the long-term dual economic features in China, studying how does income distribution gap affects rural residents’ consumption demand has vital meaning.Aiming at the domestic current situation of insufficient rural residents’ consumption demand and distensible income distribution gap, the essay, based on absorbing the previous relevant research results, explores the principle of the influence of income distribution gap on rural residents’ consumption demand under the classical consumption theoretical framework. The essay gets the agency index of income distribution gap and rural residents’ consumption demand by arranging and counting with the help of state statistics from 1992 to 2013; explores the influence on rural residents’ consumption demand from levels of income distribution gap in rural areas and urban-rural income distribution gap with the help of Weintraub’s consumption function model and grey relational analysis model. Counting methods such as OLS and WLS are comprehensively used to analyze the influence of income distribution gap in rural areas and urban-rural income distribution gap on rural residents’ consumption demand. In the analysis of grey association model, it researches the influence of uncertainty of diversified income distribution on rural residents’ consumption demand and the difference of influence degree. Several major theories are concluded by summing up the researches and explorations above.Firstly, by making a general survey on the situation of rural residents’ income distribution gap after the economic system reform, it is known that the current gap of residents’ income distribution in rural areas is distensible; in the income distribution gap of rural areas, there are income gaps in different rural areas, but which is narrowing gradually; the gap of rural residents’ income distribution in different income levels is widening continuously; analyzing from the perspective of different income sources, rural residents’ family operation income still dominates, but the proportion of the overall income reduces year by year; salary income becomes another major income resource for rural residents. Furthermore, urban-rural residents’ income distribution gap is still on the factors which widens the income distribution gap in China.Secondly, by analyzing the situation of rural residents’ consumption demands in recent 10 years, it is known that the rate of resident consumption and average consumption inclination shows the dropping trend; rural residents’ average consumption demand increasing rate fluctuates year by year. Compared with rural residents’ consumption demand difference, regional difference effect is smaller than the difference effect in different income levels. That is so say the gap of rural residents’ consumption demand in different areas is smaller than the gap of consumption demand in different income levels. But there are exceptions. For example, rich rural residents’ consumption demand structure and expense proportion in east areas and in high income levels is obviously different from that of rural residents in other areas or in other income levels.Thirdly, by making the empirical analysis on Weintraub’s consumption function model(and modified model), it is known that there exists obvious relation between rural residents’ consumption demand and income distribution gap. That is to say the income distribution gap remarkably has influence on rural residents’ consumption demand level,and the widening of rural income distribution gap restricts the generation of its consumption demand. Furthermore, urban-rural income distribution gap is an important reason for the widening of urban-rural residents’ consumption gap. Urban-rural income gap causes the faultage of urban-rural consumption, which severely restricts the improvement of rural residents’ consumption demand.Fourthly, by making empirical analysis on grey relational analysis model, it is known that, considering from the perspective of uncertainty, regional income distribution gap has the most remarkable influence on rural residents’ consumption demand; the nextis the influence of income levels; the influence of different income sources is the weakest.Moreover, the most remarkable factors that the uncertainty of diversified income distribution affects rural residents’ consumption demand are uncertainty of rural residents’ income in east areas; uncertainty of rural residents’ income in medium and low levels, and uncertainty of rural residents’ salary income. Besides, relative to the uncertainty of urban residents’ income distribution, uncertainty of rural residents’ income distribution is the important factor which causes the widening gap of urban-rural residents’ consumption and insufficient demand of rural residents’ consumption.