Research On The Changes Of The Benefits Of Urban And Rural Residents In Food Price Fluctuation

The prices of consumer goods are showing a rising trend with the development of our country’s economy. Food as an important consumer good, its price is gradually increasing. At the same time, in recent years, many countries have implemented quantitative easing monetary policy, so that food price also shows a rising trend. Due to the urban and rural dual economic structure, the consumption structure of urban and rural residents must be different, and their interests affected by the food price fluctuations are also different. To co-ordinate the development of urban and rural areas, promote the common prosperity of urban and rural areas is not only the focus of our party’s work, but also the requirement of constructing the harmonious society.Analyzing the benefits of urban and rural residents can provide a theoretical basis for the formulation of tax policy and the price level. It also has significance for the healthy development of economy and social stability.Under the condition of food price volatility, in this paper, based on the perspective of consumption structure of urban and rural residents, rural and urban residents’ consumption structure in China are modeled separately using the AIDS model. Make comparative analysis and obtain the elastic coefficient of the food consumption of urban and rural residents. Then use the compensation variable approach to calculate the benefits of the urban and rural residents under the condition of food price volatility. Finally, according to the results of the quantitative calculation,provide suggestions for the relevant departments to formulate social security, price,and tax policy in order to promote the overall welfare level of residents and improve the quality of their lives.The innovation of this paper is to measure the changes of residents’ interests by using the method of compensation variable, and to compare the benefits of urban and rural residents in number. At present, most of the researches are to analyze the change of the consumption structure of urban and rural residents. Few studies have considered the changes in the interests of residents after the fluctuation of food price.Quantitative comparison to the interests of urban and rural residents is little. From the perspective of consumption structure, through the comparative analysis of interests,the conclusion is that although the consumption of urban and rural residents in foodhas declined, but in the face of fluctuations in food prices, the average profit loss of urban and rural residents in 1992-2013 is 2.55% and 2.82% respectively. The loss of the interests of rural residents is greater than the loss of the interests of urban residents.The difference of the loss is 0.27%. Urban and rural residents only obtained interest in1997-2002 and the number was 0.67% and 0.93%. At the same time, the consumption structure of urban and rural residents is quite different. Urban residents pay more attention to meet the spiritual needs such as self health care and education and entertainment after satisfying the basic life level. In contrast, rural residents still remain at the basic level of life and the needs of the spiritual level of demand can not be met. Therefore, it is necessary to stabilize food prices. The focus is to strengthen the subsidies to farmers and increase subsidies types. Adjust the tax rate of migrant workers. Establish multi-level social security system to improve the rural social security system. Meanwhile, try to explore the positive settled scheme. Encourage farmers to become self-employed. Give policy to support the development of the service industry. Pay attention to add residents’ income, promote the benign cycle of the domestic economy.