The Impact Of Price Changes On Different Income Groups

The price is the core indicator in the process of economic operation. The price changes are inevitable economic phenomena in the process of socio-economic devel-opment. Price changes, in particular, are generally considered to be a negative impact to the socio-economic development and people’s living. However, the price changes, consumption and income level of the residents are closely related. Since the new round of rise cycle began in2009, the masses of the people, especially low-income people living costs increased, and their spending power and income were affected by certain. Therefore, to study and solve the impact of price changes on consumption and income of the residents is of an important economic and social significance to solve the related problems facing China’s economic development process.Combing the existing theoretical literature and found that as the macroeconomics research direction, subdivision of different groups of people to explore the different income groups face the price changes in their consumption, less income benefits, so from a development perspective with new data and ideas to re-examine the relation-ship between inflation and different income groups, the consumption of different in-come groups, income for the study, analysis of individual price changes, the impact of their consumption, income benefits.Firstly, by measuring the price changes and different income groups in China, I found that there are obvious differences between urban and rural areas and between urban and rural areas of different groups within the consumer, the year-on-year change in the amplitude of the residents of consumption are relatively small, one for consumer comparison rational. Since the reform and opening up the price fluctuation of different income groups CPI rose generally faster than the urban CPI rose. View after contrast derived from the ratio of urban per capita disposable income and rural per capita net income of rural-urban income gap measure, the coefficient has in-creased year by year, and the urban and rural areas internal high, medium and low le-vels also showed the same trend, different widening the income gap between the groups. Then, in order to improve the accuracy of the judgments, the empirical study, the use of the method of measurement, to establish the impact of extended linear expend-iture system model (ELES), the analysis of price changes in consumer behavior in different income groups, consumer tendency. Come to price changes on the urban and rural residents in high-income groups, the middle-income groups and low-income groups are significant effects of changes in the price elasticity calculated on the statis-tical significance of the differences; However, the price of high-income groups, con-sumer behavior affect not significant impact on the consumer behavior of the lowest income groups. Afterwards, based on the level of consumption structure of different income groups, the test disposable income and consumer spending, the impact of price changes on different groups of people, found that the changes in price move-ments relative income, low-income people than high-income people’s. Seen from these two points, the consumption structure of most prices affect not only the low-income population, and offset the degree is also part of their income increase by rising prices brought more than high-income people, which shows the price move-ments.Inflation, income growth and social welfare level is closely related to the grow-ing concern, the problem of the increasing income gap and price fluctuations. The ul-timate goal of economic development is to improve the level of welfare of all mem-bers of society, only by resolving the China price fluctuations unfavorable to low-income people and the coexistence of large income gap between the situations in order to truly improve the level of welfare of society as a whole. Policy formulation and implementation from three perspectives:First, adjust the price fluctuations to stabilize the price level for the protection of a stable macroeconomic environment, the reform of the price system, rationalize the prices of the relationship between the prices to play the role of a good alarm. Rational use of monetary policy and the exchange rate regime reform, to prevent massive in-flows of hot money, truly concerned about the impact of prices in international ma-croeconomic environment.The second is to adjust the structure of price changes for different goods and scr- vices. Consumer price index (CPI) truly reflects the face price level; Continue to promote the price reform, rationalize the price relationships to ensure that the price of energy resources is not distorted by the Chief; Stabilize price of the grain, vegetables and other basic life goods, to ensure the basic rights and interests of the middle-and low-income populations, and to continue to control the prices of consumer goods for the living and other categories.The third is to improve the income of low-income people, to narrow the gap be-tween rich and poor, To adjust the pattern of income distribution, gradually raised the income level of the residents; adjust the wage structure, and expand the proportion of residents on fixed incomes; strengthen and improve the social security system, social security with economic development level, and the last is to focus on equity and in-crease investment in public welfare.