The Influence Of Income Gap Of Residents In Our Country Consumer Demand Research

It proves that the expanding income gap will lead to an insufficient consumerdemand from western economic theory and world economic development. This isalso the reason for consumption, as one of "troika" in economic growth, especiallyconsumer contribution to economic growth, is inadequate since reform and opening.Recently, China’s Gini coefficient keeps increasing and exceeds other countries inthe same economic level. Income gap between urban and rural areas, differentindustries and areas presents the increasing trend. It leads serious deficiencies inconsumer demand by reducing average consumption tendency and consumption rate,changing consumption structure and other mechanism of action. Additionally,income gap expanding leads insufficient consumer spending during inflation period.This paper reaches a conclusion that there is a significant negative correlationbetween income gap and consumer demand based on empirical analysis of marginalpropensity to consume and the Gini coefficient. Therefore, it must narrow theincome gap, expand domestic consumer demand, optimize the industrial structure, toensure the economic coordinating and sustainable growth, in order to achieve thegoal of increasing employment, protecting livelihood of the people in a crucial sta geof the economic reform. Based on this, this paper also gives suggestions to narrowthe income gap and expand consumer demand.