Research On The Impact Of Uneven Public Expenditure On Consumption Gap Between Urban And Rural Residents

Because there are some differences on economic policies and the developme nt environment between urban and rural,the urban and rural areas had led to the formatio n of a dualistic economic structure,and a large gap between urban and rural areas with the reforming and opening.Looking back the total public expenditure of the government from 1990 to 2014,it shows there is a clear trend increasing,the gap between urban and rural areas is still grave in our country,because it is very poor in some remote mountain areas,and the road is in disrepair,there is a series of social problems occur frequently.It shows that the form of public expenditures for distribut ing goods subsidies or investment in projects is unreasonable in the past,and it will not met the requirements of economic intensive growth under the new normal economic development in China,but also not conducive to achieving the goal of coordinated development and social equity in urban and rural areas.In addition,the level of residential consumption is an important evaluation indicator for the living standards of urban and rural residents,and our rural population is more than half of our total population,but their living standards are hard to improve,because the dual economic structure between urban and rural areas.Public expenditure,as the important means of national macro-control,bears responsibility for reversing market failures and promoting social fairness.So we propose to study the problem on residents' consumption from the perspective of public expenditure,and we will try to answer two questions: at the first,how to optimize public expenditure for raising the level of household consumption.Secondly,how to adjust the proportion of public spending between urban and rural areas for narrowing the consumption gap between urban and rural residents.In the course of a specific study,in the first of al,we sorted out the three key words as public expenditure,residents' consumption,and the gap between urban and ruralresidents' consumption,and studied the relationship of them.We draw two points:(1)The conclusion isinconsistent on studying the effect in public expenditure affects household consumption;(2)The theoretical and empirical study of the urban-rural resident's consumption gap from the perspective of urban-rural public expendit ure inequality has been neglected.Secondly,we divide public expenditure into three categories: investment expenditure,livelihood expenditure,and transfer expendit ure,based on studied the theoretical connotation of public expenditure and household consumption,then we focus on the theoretical mechanism between public expendit ure ?the classification of public expenditure and household consumption with the indefinite-period consumption model,production-consumption general equilibrium model and family utility function.So it is concluded that the impact of urban-rural public expenditure inequality on the consumption gap between urban and rural residents is uncertain,the reason is that the output elasticity of public expenditure and the risk aversion coefficient of residents are uncertain.Thirdly,we empirically test the impact of multi-category public expenditure on household consumption and the impact of urban-rural public expenditure inequality on the urban-rural consumption gap by building panel fixed effect models,random effects models,spatial error models,spatial lag models,spatial Dubbin models,and multi-panel threshold models,to verify the reliability of theoretical research conclusions In the actual development of our country.We draw three points as:(1)The role of people's livelihood expenditure in rural residents' consumption is more significant than in urban areas,andthe proportion of people's livelihood expenditure between urban and rural areas has a reasonable range on adjusting the consumption gap between urban and rural residents.(2)There are significant differences in the effect of investment expenditure on the consumption of urban or rural residents,and the effect of uneven urban and rural investment expendit ure on the consumption gap between urban and rural residents with the varies of time and space.(3)The transfer of expenditure to the promotion of rural residents' consumpt io n levels is 6-10 times that of cities,but the relationship between urban-rural non-unifo r m transfer expenditures and urban-rural household consumption gap is nonlinea r,adjusting the ratio of urban and rural transfer expenditures needs to span differe nt thresholds of income,wealth,etc.In the end,from the perspectives of adjusting investment expenditures,improving people's livelihood expenditures and optimizing transfer expenditures,we propose realistic ways and policy recommendations to narrow the consumption gap between urban and rural residents based on analyzing theoretica l and empirical research results.Compared with existing researches,the work was done in this paper as the follow six points.Firstly,we have provided ideas for narrowing the consumption gap between urban and rural residents and promoting balanced urban and rural development based on optimizing public expenditure.Secondly,we have analyzed the mechanism of crowding-in effect and crowding out effect of public expenditure on residents' consumption,and we explain in detail that by building a theoretical model to improving the objectivity of argumentation.Thirdly,we divided public expenditure into investment expenditure,people's livelihood expenditure and transfer expenditure,and analyzed objectively the similarities and differences between the effects of various types of public expenditure on residents' consumption.Fourthly,we analyzed innovatively the similarities and differences on theoretical mechanism between urban and rural public expenditures that affect urban and rural residents' consumption,and we derived that the effect of uneven urban-rural public expenditure on the consumpt io n gap between urban and rural residents is constrained by the output elasticit y of public expenditure and the risk aversion coefficient of urban and rural residents with an infinite-bounded consumption function.Fifthly,after we analyzed that the output coefficient of investment expenditure is related to the stock of investment expendit ure,we study the empirical impact of changes in infrastructure inventory on consumer spending and disparities between urban and rural residents in time and space differentiation.Sixthly,because the economic gap between urban and rural areas will affect the transfer expenditure,this paper empirically examine the effect of uneven urban-rural transfer expenditure on the consumption gap between urban and rural residents with the four camps divided between urban and rural areas.