Study On The Influence Of Expected Income Uncertainty On The Consumption Structure Of Rural Residents

Considering China’s large population and rapid income increment for the moment, there is still a lot of room for improvement in enhancing the consumption level. And that comes down to enlarging domestic market especially stimulating the rural consuming market with a population of72million. Expanding rural consumption market and inspiring rural consumption potential is not merely to improve aggregate consumption of rural residents, but also to enhance the consumer quality and optimize the consumption structure. There exist studies indicating that uncertainty in income of rural residents will suppress their quantity of consumption, but hardly any research on rural residents’consumption structure from the perspective of income uncertainty. Now that income indeterminacy affects both facets, then it is undoubtedly of great significance to raise rural residents’ consumption level and optimize their consumption structure, which ought to be based on the empirical facts that rural citizens’revenue presents an unstable growth state and on analyzing in-depth the indeterminacy on rural citizens’spending constitution.The essay aims at revealing the inherent laws about impacts of income uncertainty on the consumption structure of rural residents, and make targeted proposals. The major content covers that:(1) Theoretical analysis upon impact of income indeterminacy on consumption structure of rural residents. Via reviewing past literatures and making reference to related theories, framework is constructed to explain rural residents’purchasing behaviors under the condition of income indeterminacy;(2) Statistics description of income uncertainty and structural changes in consumption trends of rural population. Contrasting measuring methods in revenue indeterminacy, precisely quantifying the uncertainty of Chinese rural citizens and uncovering its varying rules, figuring out relationships between income uncertainty and expenditure composition through comparing the two;(3) Empirical investigation of the subject. After setting up corresponding empirical model, dynamic panel with GMM method in generalized system is utilized to estimate the plus-minus and extent of residents’income uncertainty on expenses in rural districts, and eventually test research hypothesis brought up in the first place.The research results show that when referring to income indeterminacy on expenditure of various items among rural citizens, the impact and extent differ:(1) Once the income uncertainty changes0.01, expenditure on food will increase22.39Yuan, whilst that upon clothing, housing, household equipment and service, healthcare, transportation and communications, as well as other commodities and services will decrease0.77Yuan,4.76Yuan,1.96Yuan,1.23Yuan,3.38Yuan and2.68Yuan respectively;(2) It can be seen from the above number that only food outlay rises, which belongs to low-end consumption, by contrast, the rest six high-end categories all decline. Thus seeing from the whole picture, uncertainty in income of rural residents restricts the upgrading of their expenditure composition, and has a negative impact in the process of optimizing it;(3) Some other factors exert influences on upgrading consuming structure of rural citizens, too. First is that purchasing habits will promote current spending on all items apart from food. Second is that income level plays individual roles in promoting consuming behaviors of diverse commodities or services, and increasing income of rural residents will fundamentally raise their consumption level. Last but not the least, financing restraints can restrict basic living consumption of rural population.In order to elevate the consumption level among rural residents and perfect their expenditure structure, some measurements need to be taken such as income uncertainty be lowered, consumption customs be fostered, and financing constraints be broken. That is what the results imply in policy aspect, details are as below:(1) by deepening the adjustment of agricultural structure, changing the mode of agricultural production, accelerating the transfer of rural labor, broadening income sources of rural residents, increasing financial support for agriculture and stimulating rural economic vitality, the steady growth of income of rural residents can thereby be realized;(2) guide people to establish reasonable consumer attitudes, encourage consumption of service merchandise, create a good atmosphere and culture in consuming, and cultivate rational consumption habits of rural residents;(3) innovate financial institutions to develop financial products, expand financing channels to ensure financial supply, consummate financial services system in rural areas;(4) strengthen infrastructure construction, improve the consumer market circulation system, further standardize the consumer market, so as to optimize consumption environment in rural areas.