The Analysis Of Reasons And Residents' Propensity To Consume Of Rural Districts In China After Late 1990's

Consumption is a main part of aggregate demand. The change of consumption will influence economy of a country. When the demand of consumption increase, the economy of the country would be in expansion;when the demand of consumption shrink, the economy of the country would be in recession.There are more factors which influence people's consumption;one is propensity to consume. It has two forms: average propensity to consume and marginal propensity to consume.The shortage of consumption in this period becomes a hindrance of development of our country. Propensity to consume of resident of a city in the structure of consume raise. It suggests that the consume market in countryside fatigued and weak in this period. The reason for this is that the propensity to consume is low.There are so many factors can influence the propensity to consume. When it comes to income, not only disposable income, but also permanent income and expected income;social security, especially unemployment and retire security;the complement of credit market, constraints liquidity and preference or habit influenced by system, race, education, religion and custom.This paper has three parts, It is recount propensity to consume of peasant in china in later 1990s'in the first part, and draw a conclusion that propensity to consume of peasant in china is low;the reasons for low propensity to consume of peasant in china were emphasis analyzed in the second part;and it puts forward policy advice based on the reasons mentioned above in the third part.