A Research On Urban And Rural Inhabitants' Consumption Function In China

The strange combination of high economic growth rate and low consumption rate in China is generated by keeping declining of the inhabitants'final consumption rate. In order to ameliorate this combination, the government needs to take a lot of policies, and gather some scientific consumption theories as instructions. This paper, grounded on Chinese economic actuality, is written to get reasonable results and to put forward feasible suggestions by standing on the shoulder of predecessors and adopting innovative demonstration methods.Presently, uncertainty is the hotspot of consumption theories. But we are confused because that most scholars only considers income-uncertainty. However, this paper puts forward a new concept as follows, the uncertainty means that the consumer engenders his own psychological anticipation about the future income uncertainty and future disbursement uncertainty by analyzing his past income and disbursement level as well as fluctuation. Then, this paper analyzes the objective existence of the future income uncertainty and future disbursement uncertainty, and how they influence on consumption. Moreover, the disbursement uncertainty is divided into education, habitation and medical treatment disbursement uncertainty. The trend of aging in China which is increasingly serious and has being cared and discussed by people will also be considered when the consumption function is set up. And this paper discusses how aging influences on consumption in detail.This paper adopts co-integration test to research whether the longtime relation is exist between average consumption of townsman or countryman, average income of townsman or countryman, interest rate, future uncertainty and population age structure. Finally, it gets four results. First, average income is the primary factor on average consumption. Second, consumption is negatively correlated to interest. Third, the future uncertainty influences on consumption negatively. Fourth, there is a positive correlation between the aged-coefficient and consumption. This paper compares urban consumption function with rural consumption function, truly there are some differences between them, but they are explained well. According to the results, this paper gives the government some suggestion to improve consumption. First, trying it's best to improve the amount of citizen'income. Second, stabilizing the anticipation of income uncertainty and reducing the anticipation of disbursement uncertainty. Third, pushing urbanization process and developing the grey industry.