The Study Of Chinese Income Distribution And Its Effect On The Consumption

Income distribution is an important issue in the economy; income inequality is not only related to economic growth, but also to social stability and social equity. Under the reality background of enlarging income gap, we research the mechanism and the effect of income distribution on consumer focusing on income distribution.This paper focuses on income distribution and consumption from four aspects. First, we analyze the measure of income distribution gap and the institution root. Then, we research the relationship of income distribution gap and consumption. After that, we study effect and mechanism of income distribution uncertainty on consumption. Finally, we analyze the conduction process of redistribution policies to consumption. The paper is divided into seven chapters, three parts.The first part consists of chapter I and II, comprehensively descript and analyze the related research system and context of income distribution from the theory of income distribution and the existing research results. The second part includes chapter III and IV, which analyzes the formation mechanism of income distribution gap, the reality of Chinese income gap and measure results, the institution root of a widening gap in income distribution and solutions. Chapter V, VI and VII belong to part three, which includes three aspects of the effect of income distribution gap to consumption, the effect of income distribution uncertainty to consumption, and the conduction process of redistribution policies to consumption.The first chapter is the introduction, mainly describes the background and significance of the topics, and systematically describes research ideas and research framework, the paper's research methods, research contents and main contribution, which concentrates on the main points of the whole text.The second chapter is the theory and review of income distribution and consumption. The paper firstly analyzes the economic impact of income distribution, focusing on the relationship between income distribution and consumption, thus gets the results of income distribution based on different measure indicators, and analyzes advantages and disadvantages. Based on that, the paper systematically describes related literature about income distribution and consumption.Chapter III is about the realistic situation of Chinese income distribution and consumption. In this chapter, we first analyze the reality of income distribution in our country, and then analyze the consumption level and consumption volatility, finally get impacts and results of our country current income distribution to economics based on the relevance of income distribution and consumption.Chapter IV is the empirical research of income distribution of our country, which is a empirical results of income distribution state through empirical measure of income distribution indicators in our country. First, the article gives the main factors affecting the distribution of income, including human capital, labor mobility and other factors; then, the paper empirically estimates the Gini coefficient of our country, which based on correction method of urban and rural weighted by Dong Jing and Li Zi-nai(2004); finally, the article gets a empirical estimate, and makes the ER index and EGR index of our country income distribution, focusing on the degree of polarization of income distribution.Chapter V is about the impact of the unequal distribution to consumption. In this chapter, we first analyze factors affecting consumption; then, we build the associated model of income distribution and consumption, in the chapter, based on the formation of income gap, we analyze the institution root and give three important solutions of governing income gap, including monopolies governance, the tax system reforming, supervision mechanism and information symmetric improving. We select the dynamic panel data model for empirical analysis using data from 31 provinces of the whole country. At last, we make a empirical test focusing on the association of income inequality and consumption levels, and give the conclusions of income inequality and consumption.The empirical result shows that residents of our country have a lower marginal propensity to consume; the enlarging of income gap has a big difference consumption impact of urban and rural residents; the expansion of government spending does not significantly affect the level of consumption; low-income groups have high consumption inertia. Therefore, the rural issues still should be incentives for efficiency rather than try to avoid the widening gap in income, and the income gap between urban residents should be reasonably contained form the perspective of income gap and consumption.Chapter VI is the impact of income distribution uncertainty on household consumption. First of all, we discuss the methods of measuring income distribution uncertainty. Then, we analyze the impact mechanism of income distribution uncertainty on the consumption decision-making. At last, we build a panel data model to make an empirical analysis and give relevant conclusions focusing on the impact of income distribution uncertainty to consumption.The empirical conclusions by chapter VI show that income uncertainty has a negative impact on consumption; besides, income level has a significant impact on consumption, however, we can not get the conclusion that the significant impact due to a high marginal consumer tendency; except that, the impact of housing, education and health spending on consumption is in both directions. All in all, in our country, factors of urban-rural gap led to a significant difference of consumption behavior of urban residents and rural residents; besides, rural residents have a more potential than urban ones, but because of limitations of the market institution and the labor division, the capacity of rural household consumption has not been effectively expressed.The impact of redistribution policies on household consumption is in chapter VII. In the chapter, we first analyze the theory descriptions of fiscal policies and income distribution from the tax revenue, the transfer payment and the impact of fiscal expenditures on income distribution; then, we make an estimate on the expansion effect of income distribution to consumption; a evaluation of income distribution has been gotten at the end of the chapter.From estimation results of empirical model, we can see the following remarkable fact that the tax has a negative impact on consumption; and transfer payments can not stimulate consumption; and besides, the enlarging of urban-rural income gap is not good for the increase of consumption; finally, the ratio decrease of the urban and rural public expenditure promote fiscalequity, but it also led to a lower consumption level. Therefore, we can determine our tax with inverse characteristics and mechanism, and the expansion of urban-rural gap is not conducive to raising the level of consumption neither the economic development. Income redistribution policy needs institutional and policy-making reformation, in order to effectively narrow the income gap and promote economics growth.In summary, the research of income distribution in our country has a long way to go. This article makes the researches form aspects of the measure of income distribution gap, the impact of income distribution gap on consumption, the transmission of income distribution uncertainty to consumption, and the effect of income redistribution polices to consumption. However, we must admit that the relevant data of the field of income distribution is far from enough. And there is a range of issues in the institutionalization of economic development. Besides, the research related to income gap we have given merely depends on the complete of data system and the improvement of method. The research in the paper is just some preliminary discussion, and the following studies include the micro-data collection of income gap, the theory model construction of income distribution and economics growth and other aspects.Hope the study can be used as a reference to the relevant researchers.