Urban Consumer Research Demonstration Effect On Consumption Of Rural Residents

The fundamental purpose of economic growth is to improve the level of consumption of the residents and to let residents to share the results of national development. Raising the level of consumption of the residents is the fundamental driving force for sustained economic growth. Consumption, investment and exports are the three driving forces for economic growth. Since the2008global financial crisis, in the case of weak investment demand and export demand, the expansion of consumer demand has become the key to economic growth. Now, there are650million of China’s rural residents, accounting for half of the country’s population. The consumption level of rural residents has been much lower than the urban residents. To improve the level of consumption of the residents should focus on improving the level of consumption of rural residents. Accordingly, researching on consumption of rural residents, expanding the consumption level of rural residents and optimizing the consumption structure have very important practical significance.The dual economic structure led to a huge difference in consumption of urban and rural residents. With urbanization and Residents of Farmers, the rural society has undergone great changes, and the consumption pattern of rural residents is constantly changing. The consumption pattern of urban residents is more advanced than rural residents. Therefore, the consumption pattern of urban residents has become the object of rural residents to learn.The paper is divided into six chapters. Chapter1is an introduction. Firstly, discuss the background and significance of the study, and review the researches at home and abroad. Secondly, introduce the research ideas, main content, research methods and innovative of the paper. Finally, introduce the basic concepts and assumptions of this article.Chapter2analyzes the consumption gap between urban and rural residents. This chapter studies the consumption gap between urban and rural residents in four areas which are the level of consumption, the gap in the propensity to consume, and the gap in the consumption structure. Show that there is a considerable gap between the consumption of urban and rural residents,Chapter3analyzes the path of the demonstration effect. This chapter discusses the connotation and sociological basis of the demonstration effect, and analyzes the pathway of the demonstration effect. Pathway includes the following six points:rural labor force flows between urban and rural areas, the interaction between relatives and neighbors, infrastructure construction, the improvement of the social security system, the impact of the mass media, policy factors.Chapter4is an empirical study on the demonstration effect. According to Relative income hypothesis of consumption, combined with Chinese actual situation, this chapter builds a linear model of the demonstration effect. The results of the empirical analysis show that there is a certain demonstration effect between the consumption of urban residents and rural residents. The linear model has some limitations. So, this chapter builds a semi-parametric model to do further research on the demonstration effect. And then compare the fitting effect of the linear model and the semi-parametric model. The results showed that the semi-parametric model is better than the linear model in the fitting effect.Chapter5is the policy recommendations. Based on the foregoing findings, propose several measures to promote the demonstration effect:Pass the state-of-the-art concept of consumer culture to rural residents; increase the income of rural residents, then enhance their consumer confidence; improve the rural social security system, then change their consumer expectations; strengthen rural infrastructure, then improve the consumption environment in rural areas and promote the exchange of urban and rural residents and so on.Chapter6is the summary and outlook of the study.The innovations of this paper are as follows:Firstly, this paper adds sociological factors to the study of the consumption of residents. In the context of urbanization, rural residents live and work in town. Their social status has changed, and their assumed role in society has shifted. Secondly, their social behavior is changing, and their consumption pattern is changing, too.The consumption pattern of urban residents has become the object of rural residents to learn naturally. Therefore, the paper studies the demonstration effect between the consumption of urban residents and rural residents, and then proposes measures to expand the consumption of rural residents. Thirdly, according to the realities of social transition, establish a consumer research framework with demonstration effect, and then build a linear model and semi-parametric model to conduct empirical research on the consumption of rural residents.The use of semi-parametric model enriches the research methods of consumption problem.