The Consumption Difference Of Urban And Rural Residents In Shandong Province

Consumption difference between urban and rural residents is the inevitablephenomenon during economic development process in developing countries.Stimulating domestic demand and expanding consumption have already becomeChina’s key of adjusting economy structure, improving the quality and efficiency ofeconomic development. Shandong province, as a miniature of China, is the bigprovince of population and economy. Though the total demand of consumption inShandong province is growing, the proportion of residents consumption accounted forGDP is decreasing continuously. The unbalanced regional development and thedifferentiation between urban and rural residents expand the differences ofconsumption. Therefore, Shandong province must take effective measures to narrowthe gap between urban and rural residents’ consumption, to activate the domesticconsumption, to enhance the consumptive ability, and ultimately improve thelivelihood of people, promote the development of economic and realize harmonioussociety.First of all, the paper has compared the level of consumption, the structure ofconsumption, regions difference and income groups from the perspective ofconsumption differences between urban and rural areas and drawn the followingconclusions: (1)The differences of consumption level change in fluctuation. Sincereforming and opening, the absolutely gap of consumption level between urban andrural residents is expanding in Shandong province, and in 1994 the gap speed isincreasing. In space, compared with the relative difference between the average ofprovince and cities, and the types of 17 cities are classified. (2) The consumptionstructure difference between urban and rural is significant. From cross-sectional data(2010), the top four differences in order is clothing, other goods and services, housingand services of education, culture and entertainment. Based on the ELES model of1978-2010 time series, rural long-term marginal propensity is higher than urban. Therural propensity of consumption in food, household equipment and housingconsumption is higher than urban residents, and lower in clothing, entertainment andeducational aspects. (3) Regional consumption difference between urban and ruralresidents is significant. The east region’s extraversion is higher than western region,so eastern consumer are more sensitive than the west in financial crisis of 2008.(4) The consumption differences of different income groups is outstanding. At present themiddle-income class is the main body of consumption, the consumption pursuit isfrom quantity to quality.Secondly, it has analyzed the influencing factors of consumer differences fromqualitative and quantitative aspects. Qualitative analysis has generalized from natural,economic and social aspects. The difference of consumption concept and environmentare natural factors; the income level, the distribution of income, the expecteduncertainty expenditure, interest rate and consumer credit market are economicfactors; population, system and policy are social factors. In order to further explainthe various factors on the difference of consumption of influence. Quantitativeanalysis has drawn the conclusion: income rate of urban and rural> interest rates>non-agricultural proportion > expected expenditure of children>inflation rate >consumption credit per capita. In order to further investigation of main influencefactors, the paper has applied OLS and ECM model to analyze the income level,income distribution, price and interest rates to urban and rural residents, and drawconclusions: permanent income of urban and rural residents accounted for about 90%in Shandong province, consumption and income of urban and rural residents have thelong-term equilibrium relationship. The consumption elastic coefficient of ruralconsumers is higher than urban residents, and rural consumers are more cautious.Finally, based on the front analysis it obtains that starting consumption marketand narrowing consumption differences between urban and rural residents are veryimportant for the development of economic. And paper puts forward tocountermeasures from positive narrowing the income gap, cogent improving ruralconsumption environment, effectively promoting the upgrading consumption structureand vigorously carrying out system innovation and policy adjustment to promoteconsumption of urban and rural residents and stimulate the growth of economic.