The Research On The Discrepancies Of Guangdong's Rural And Urban Residents' Consumption Function

This paper applied the co-integration theory on the analysis of the relation between the consumption and income of Guangdong provincial urban residents, constructed a long-run consumption function and short-time first-order differential error correction model based on the province related data range from 1980 to 2008. Meanwhile, it constructed the local city level consumption function with 12 cities'panel data. The paper selected some indexes which have impacts on consumption, analyzed these indexes'real function and drew the conclusion that consumption function had some imparity between the whole Guangdong province and its subordinate cities. On the provincial level, the permanent income have the most decisive effects on the household consumption, real interest rate and inflation rate have minor influences. Based on the city level consumption function with data from 12 cities, it disclosed that the pearl river delta districts'urban residents' disposable income have a evidently more impacts on their consumption than other areas. Compared to the local city level consumption function with the data from 12 cities, the residents' consumption has more reliance on income when the analysis was based on the whole provincial data. Based on the local city level consumption function, the expected price level has certain negative impacts on consumption which have not revealed in the whole province level consumption function.