The Influence Of Residents’ Income Change On The Structure Of Public Goods Supply

As the preference for public goods is different among residents with different income levels,thus, with the growth of the residents’income, the public demand for the public goods withchance accordingly. This kind of change will lead to the change of structure of public goodssupply, which is one of the main factors that should be considered during the construction of afiscal expenditure pattern oriented by people’s livelihood. This paper tries to analyze the impactof the residents’income change on the tructure of public goods supply in the context of China’seconomic structural trabsformation, and based on finance of the people’s livelihood. I analysisresidents’ income change on the structure of public goods supply between1978and2006, use theExtend Linear Expenditure System as the main method to study income elasticity change ofpublic goods supply. From all these, I get the following conclusion: the income elasticity ofsome public goods is less than1with the change of resident income, meaning that when people’sincome increases, the increased demand of the residents of such public goods, but this kind ofdemand for public goods, the rate of increase is less than the residents the rate of increase inincome. In addition, the income elasticity of public goods is positive, even greater than1, such asthe defense expenditure and capital expenditure, indicating that when people’s income increases,the increased demand of the residents of these two types of public goods, and the rate of increaseof demand for public goods greater than the magnitude of the increase in residents’ income. Inaddition, this paper also analyzes the changes of public product supply structure in the UnitedStates, Germany, Japan, the three typical developed countries, and make the correspondingsummary.Basis on this analysis, the article pointed out the problems of the current public productsupply structure and put forward the corresponding optimized thoughts, includes the publicneeds determine the reasonable structure of public product supply, optimization of the main partsof public product supply structure, correction of the government functions, improve theefficiency of the supply of public goods.