| Since the reform and opening up, on one hand, the income of urban and rural residents in China is increasing rapidly, but the income gap is widening continuously; on the other hand, the consumer demand is growing fast, but the consumption rate has been declining. As an International power, if we want to remain invincible, we must make every attempt to expand domestic demand. Recently the periodic factors which may influence consumption has been eased, but only the income distribution factor has no obvious improvement. Therefore, further empirical research in view of the influence of income gap between urban and rural residents on consumption demand has important theoretical and practical significance. Based on the research at home and abroad, this paper puts forward the paths and effects of the income gap of residents on consumption level and consumption structure. Through the use of a linear regression model and panel data model, empirical analysis the influence of income gap between urban residents, the influence of income gap between rural residents and the influence of income gap between urban and rural residents on consumption level and consumption structure in China. The conclusions are that:on one hand, the income gap between urban residents in China has a significant negative effect on the level of consumption the demand, income gap of rural residents has little effect on the level of consumption demand, and the income gap between urban and rural residents has significant effect on the level of consumption demand. On the other hand, the income gap of urban residents on consumption demand structure have significant impact, the income gap of rural residents has little influence on the structure of consumption demand. Finally, suggest that in order to expand the consumption demand of urban and rural residents, we should narrow the income gap of urban residents, and increase the income of rural residents. |
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