Research On The Influence Of Labor And Capital Factor Price Distortion On Urban-rural Consumption Gap

For a long time,factor price distortion and urban-rural consumption gap are the economic problems that researchers pay close attention to.With the gradual reform,the delayed opening of the factor market hinders the rational allocation of factors.With the government’s administrative intervention,the distortion degree of factor prices is further deepened,which will not only restrain the transformation and upgrading of economic structure,but also affect people’s life and weaken their consumption ability.Since the founding of new China,the development pattern of urban-rural dual economic structure leads to obvious differences in residents’ consumption with different identity tags.While consumer spending increased,urban-rural consumption structure gap still present obvious asymmetry.The existence of consumption gap not only restricts the balance of social supply and demand,but also inhibits the improvement of residents’ consumption rate,which is not conducive to the transformation of the development mode of consumption-driven economic growth.Therefore,this paper explores the influence of factor price distortion on urban-rural consumption gap from theoretical and empirical perspectives,so as to provide some new ideas for improving the urban-rural consumption gap and improving residents’ consumption level.This paper,by sorting out the relevant literature on the calculation method of factor price distortion,selects the production function method which is relatively recognized by the academia to calculate the degree of factor price distortion in 30 provinces of China from 2000 to 2016.The results show that the distortion of interprovincial factor prices is not invariable,but there is a tendency from negative distortion to positive distortion,and the distortion coefficient of capital price is obviously greater than that of labor price.Furthermore,from the perspective of theory,this paper analyzes the mechanism that factor price distortion will affect urban-rural consumption gap by affecting urban-rural income gap and industrial structure upgrading.Then,by constructing the econometric model,we use the systematic GMM two-step method to examine the intermediary transmission mechanism of the influence of factor price distortion on the urban-rural consumption gap.The empirical results show that: factor price distortion has a significant positive effect on urban-rural consumption gap;after the introduction of the intermediary variables urban-rural income gap and industrial structure upgrading,factor price distortion will aggravate urban-rural consumption gap by widening urban-rural income gap and inhibiting industrial structure upgrading;by dividing China into three regions,east,central and west,it is found that the positive impact of factor price distortion on urban-rural consumption gap is different in different regions,and the force of factor price distortion on eastern and western China is greater than that on central China;we re-examined the effect of factor price distortion on the urban-rural consumption gap by replacing the factor price distortion measurement method,and confirmed the strong robustness of the research results.Finally,three policy suggestions are put forward based on the theoretical and empirical analysis results,so as to further reduce the urban-rural consumption gap and raise residents’ consumption level to a new level.