The Research On Disparity Of Consumption And Its Influence Factors Between The Urban And Rural Residents In Hunan Province

Consumption is an important driving force of economic growth. Since the financecrisis from2008, the increasing rate of the national trade exporting has been limitedand domestic rate of investing is high, to expand domestic demand has been thesignificant channel to push economic growth. As one of the significant roles in the riseof central China, Hunan province has undertaken the heavy responsibility of expandingdomestic demand and promoting economic growth. It’s necessary to take reasonableand effective measures to boost consumer spending. Concerning about the socialstructure of consumption and facilitating the consumption equity has been core subjectto stimulate consumer demanding and stabilize economy developing. Since the reformand opening-up in China, the disparity between the urban and rural residents has beenenlarged constantly. The ratio of consumer spending between the urban and ruralresidents has increased from2.77in1978to2.83in2012. What’s more, it evenreached3.26in2010. The Engel coefficient of rural residents in2012was just equal towhich of urban residents at ten years ago. We can see that it resists large gap betweenthe two parts of residents in both the consumption level and structure.This paper takes the disparity of the consumption between the urban and ruralresidents in Hunan province. After the combing of related consumption theory, thedisparity of the consumption is exploded with perspectives of gross, quality andchanging tendency. The study of disparity in the level, structure, tendency andelasticity of consumption shows both the gross and quality of the consumption of ruralresidents are far behind which of urban residents and the market demand in ruralregion remain to be exploited. Then the principal factors of consumption disparity arediscussed, which involve difference of income, dual economic structure, financedeveloping and governmental expenditure in public service. The result of empiricalanalysis based on VAR indicates: it resists long-term equilibrium relation between therelated influence factors with disparity both in consumption level and structure. Theenlargement of the income gap of urban and residents promotes the disparitysustainably and significantly. The remission of dual economic structure can lessen thedisparity providently and continuously. Increased finance developmental level bringsthe disequilibrium effect higher than income increasing effect, which promotes thereduction of disparity, but this effect has some extent of hysteretic nature. Government expenditure level in public service can restrain consumption gap effectively though theinfluence in disparity of consumption structure. At last, based on previous arguments,the paper puts forward some suggestions on how to shrink the disparity of theconsumption between the urban and rural residents in Hunan province, which involvenarrowing the income gap between urban and rural areas, alleviating the urban andrural dual economic structure, balancing urban and rural financial development,persisting urban and rural public service input and reducing the gap between urban andrural consumption environment.