Research On The Effect Of Different Income Sources To Household Consumption Of Urban And Rural Residence

It is a common fact that our country’s resident consumption is at a low level. As oneof the three promotions to the economic growth, the consumption level of China havealways had obvious gap compared with developed countries in the world. Concludedfrom the data of2012, the consumption rate of China is48.8%, lower than thehighest peak in1981by18.3%. Therefore, it’s important for us to find out how toimprove the residents’ income, promote the consumption growth and boost domesticdemand in our country.Income is one of the key factors that affect consumption. According to differentsources, income can be divided into four parts: wage income, the operating netincome, property income and transfer income. In this paper, in the perspective ofdifferent income sources, we choose the data from1980to2011in Guangdongprovince and use the VECM model to discover how the different sources influentconsumption. The results showed that: for rural residents, the current salary incomehas a negative effect on consumption and lag salary income has significant effects onconsumption. The operating income of household has the greatest impact onconsumption. While the property income and transfer income has no significantimpact on consumption compared to the others. For urban residents the current wageincome effect on consumption is negative and lag wage income have significantinfluence to the consumer. The operating income of household has minor effect to theconsumption. The property income and transfer income has negative effect toconsumption too. Therefore, from the perspective of different sources of income, wemust increase the income of urban and rural residents. At the same time, thegovernment should establish a perfect system of public service to solve the mostconcerned problem of residents.