Research On Financial Resource Allocation And Consumption Difference Between Urban And Rural Areas

This article is an empirical research about the financial resource allocation and the differences between urban and rural residents’consumption. As an important part of the social reproduction, consumption is not only an important force driving of Chinese economic growth, but also have a close relationship with the transformation of the mode of economic development in our country. Our country has long been the typical pattern of urban and rural "dual" economy, so the urban and rural residents’consumption level and living standard gap is further widening. This will not only further expand the gap between urban and rural economic development level, but also conducive to stimulating domestic demand policy implementation in China and the transformation of the pattern of economic development. The existing research has carried on the thorough discussion on Chinese urban and rural residents’consumption characteristics and influence factors of differences and so on. These research results compare the marginal propensity to consume and average propensity to consume and related indicators to concrete analysis of urban and rural residents’consumption differences through the establishment of consumption function. With the constant improvement of China’s financial system in recent years, the emergence and development of consumer finance is playing more and more important effect to boosting the urban and rural residents’consumption level. However, the consumer finance in our country is still in the beginning stage at present. It needs to further explore and perfect in many respects. It is new challenge for our country to form a sustainable development style of consumption, consumer finance, and economic in the development progress of the financial system. Based on this, the article will break through the income factor, and expand the influence factors of differences between urban and rural residents’consumption from income to the field of financial resource allocation. Then, the article will discuss the influence between financial resource allocation and residents’consumption in the process of financial development.1. The research contentThe research content in this paper mainly includes:(1)Theoretical review and reference. Based on the review of the consumption theory, the financial resources allocation theory and the coordinated development of urban and rural areas theory, it will establish theory support for the paper. On this basis, this paper will do general theoretical analysis on the allocation of financial resources and the residents’consumption differences. And this paper will describe the transmission mechanism of the financial resources allocation acting on the residents’consumption.(2) The analysis of changing path on the financial resource allocation and the residents’ consumption. This paper will analyze the changing path on the financial resource allocation and the residents’consumption through the data from2001to2010at first. Then this paper will carry on the comparative analysis of urban and rural areas and the comparative analysis of different regional areas. In the end, this paper will reflect and reveal the changing tracks and the law of natures on the financial resource allocation and the residents’consumption.(3) The empirical study about financial resource allocation and consumption difference between urban and rural areas. By using panel data, this article will do the empirical research about financial resource allocation and consumption difference between urban and rural areas. Under the premise of the setting of the theoretical model and variables, this article will do the overall effect analyzing, the period effect analyzing and the regional effect analyzing by using Eviews6.0software.(4) The mechanism and model study of financial resource allocation on the narrowing the difference of urban and rural consumption. This paper will carry on the mechanism and model studying of financial resource allocation on the narrowing the difference of urban and rural consumption through using the method of institutional economics. The mechanism study of financial resource allocation on the narrowing the difference of urban and rural consumption includes the coordination mechanism, the policy mechanism of induction mechanism, the region as a whole mechanism and the interactive mechanism between urban and rural areas. And the model study of financial resource allocation on the narrowing the difference of urban and rural consumption mainly includes the government model and the market model.(5) Research conclusions and policy recommendations. This paper gives the research conclusion through-the evolution path analysis and the empirical research. On the basis of the combination of mechanism and pattern design, this paper puts forward some relevant policy suggestions which can give full play to the effect of financial resources allocation and further narrowing the difference of urban and rural residents’consumption.2. The research conclusionThe research conclusions of this paper include:(1) Income is still the important factor which affects the urban and rural residents’consumption. Both in terms of long-term or short term, the income of urban and rural residents is still the important factors which affect the consumer demand. And because of the increasing in the number of uncertainty factors of urban and rural residents’income growth, the consumption demand of urban and rural residents are restricted in a larger extent by the income effect in the short term. The rural residents’consumption demand are more easily affected by their income than urban residents’ consumption demand. However, the further widening of the income of urban and rural residents drives a further wedge between urban and rural residents’consumption level with the development of our country’s economy.(2) Financial resources allocations have had an impact on urban and rural residents’ consumption demand. But the effect is different. In the long term, the loan and insurance has a certain influence on urban and rural residents’consumption. The effect of loans has a positive effect to urban and rural residents’consumption; while the effect of insurance has a negative effect to urban and rural residents’consumption. Obviously, the loan can promote the growth of the urban and rural residents’consumption demand; while the insurance become the "burden" of urban and rural residents’life. For the comparison of urban residents and rural residents, the "squeezing" effect generated by the insurance on the rural residents’consumption is larger than on the urban residents’ consumption. This further expands the gap between the urban and rural residents’consumption in China, and it is not conducive to urban and rural economic coordinated development.(3) There is an obvious times feature about the financial resources allocation influencing the urban and rural residents’consumption. Compared to the period of "10th five-year plan" and the period of "11th five-year plan", we can find that the "squeezing" effect generated by the loan on the urban residents’consumptions are strengthened, but the "squeezing" effect generated by the loan on the rural residents’consumptions are reduced. We can also find that the "crowding out" effect generated by the insurance on the urban and rural residents’consumptions are strengthened, and this kind of situation in the rural residents’consumption is particularly obvious.(4) There is an obvious regional feature about the financial resources allocation influencing the urban and rural residents’consumption. Because there is a huge difference in natural geography and social economy development in our country, the effect of financial resource allocation on urban and rural residents’consumption exist the characteristics of regional differences. Loans of eastern and western areas in China had a "squeezing" effect on urban and rural residents’consumption. For the urban and rural residents’consumption in the central region, it has produced a "crowding out" effect; Insurance had a "squeezing" effect for urban residents’consumption only in the eastern region. However, insurance had a "crowding out" effect on the central and western China urban residents’ consumption and the east, central, west rural residents’consumption.3. The policy recommendationsThe policy recommendations of this paper include:(1) Our country should further improve the income of urban and rural residents, constantly optimize the pattern of national income distribution, and speed up the growth of the rural residents’ income. Therefore, the government should publish relevant policy, further consummate the current income distribution system in our country, improve the department of urban and rural residents in the share of national income, and improve the labor income of urban and rural residents. And the government should further promote China’s income tax system reform, give benefits to the people, and improve the disposable income of urban and rural residents. In the process of improving the level of the income of urban and rural residents, the government should pay special attention to improving the income level of rural residents in China. Various comprehensive measures should be taken, and the basis the rural residents’income should be strengthened. The government should improve their consumption ability especially through increasing their property income.(2) The government should consummate the financial resource allocation policy, further optimize financial resource allocation structure and system in our country, and promote the financial resource allocation effect of urban and rural residents’consumption. The governments at all levels should publish relevant policy to further improve and perfect our country consumer credit service system, constantly improve the supply ability of consumption credit; Commercial Banks should pay attention to innovation and the development of differentiated consumer financial products when developing consumer finance for consumer financial products, and the Commercial Banks should have different strategies of consumer financial products for different consumer groups; Government and commercial Banks need to strengthen the oversight and control financial risk from consumer finance; The government should further improve China’s social security system, and constantly improve the system of basic medical insurance for urban residents and rural cooperative medical insurance system.(3) The government should formulate different financial resource allocation policy; further strengthen the financial resources allocation of influence on urban and rural residents’consumption. Because the financial allocation of resources effecting on the urban and rural residents’consumption has a significant regional character in our country, the government must give full consideration to the characteristics. We could not use the "one-size-fits-all" model in different areas, and we should set policy according to the local actual. On the one hand, we should increase the central and west financial resources allocation, especially in central configuration of financial resources. On the other hand, we strengthen regional economic cooperation and the free flow of financial resources between various regions.(4) The government should make effective fiscal policies, change the urban and rural residents’ consumption idea, give full play to its role in promoting urban and rural residents’ consumption. When the governments make fiscal policy, more financial fund should be used for rural residents. The government should improve various subsidies for rural residents, especially the rural residents’ consumption subsidies. And we should fully arouse the enthusiasm of the rural residents’ consumption which can boost the rural residents’ consumption demand and gradually reduce the difference of urban and rural residents’ consumption. For the urban residents, they should make full use of urban areas in the development of economy, perfect market economy system and the abundant economic resources which can drive the urban residents’ consumption demand. In addition, urban and rural residents in China need to change the traditional consumption concept. We should take the concept of consumer finance into the different levels of consumer groups, which can boost our country urban and rural residents in turn.