Empirical Analysis Of The Impact Of Chinese Rural Residents’ Income On Consumption

Mature economic theory suggests that the driving force of economic growth comesfrom consumption. And rapid economic and social progress endows consumption evengreater function, consumption level and structure give an increasing important influenceon social production and life. Looking from the practice of western nation, the proportionof consumption in the national economy should be stable at around60%, this is areasonable choice for economic development. Since the reforming and opening up,especially after joining in the WTO, our rapid growth was mainly driven by investmentand foreign trade, in the meantime, consumption not only get a boost but more and moreweak. Maximizing the multiplier effect, consumption has more obvious role in promotingeconomic growth than investment and exports. Especially in the post-crisis era, how tostimulate domestic demand has a special research value. With the acceleration of thecurrent process of Chinese urbanization, economic conditions in rural areas has greatlyimproved, the consumption structure of rural residents’ is optimizing and upgrading onthe basis of the rising income level. But compared with the Western countries, thecontribution of Chinese consumer expenditure to economic growth is still quite low, thegap between the two are obvious. How to start domestic consumer demand, especiallythe demand of the majority of rural residents with important theoretical and practicalsignificance, is an important task at this stage.This paper choose to use the method of theoretical analysis and empirical analysis,using statistics, econometrics and other tools synthetically to study the impact of Chineserural residents’ income on consumption. At first, introduce the mainstream Westerneconomic consumption theories, give a brief literature review about recent research inthis field which has certain achievements at home and abroad, and give qualitativeconcept and explanations to the related concepts of income and consumption. The secondchapter is the experience description of rural residents’ income and consumption,indicating the results of recent developments, problems, influencing factors, and point out the correlation between income and consumption. From the third chapter, on the basisof previous analysis of theory and current situation, make an empirical analysis on theimpact of Chinese rural residents’ income on consumption by the use of linear regressionmethods and mathematical modeling, research the effect more detailed, and at the end ofthe chapter briefly summarize the result. Finally, to sun up the discussion of the previouschapters, propose countermeasures and suggestions to increase farmers’ income andpromote rural consumption, try to find a path to pull the demand of farmers.