An Empirical Research Of Consumption Differential Between Urban And Rural Households And Rural Internal Households

In the process of reformation and opening-up in the past thirty —seven years, China’s economy rose rapidly with an average speed of 8%, and achieved fruitful results. With the deepening of market economy, China’s economy, relying on investment and exports as a growth momentum, gradually exhausted. As one of the troika for economic growth, consumption has become a new source of sustained economic growth. However, with the artificial division between urban and rural areas, labor, capital and information presented to urban in one-way flow, which caused that institutional binary structure gradually evolved into marketable dual structure such as income, security, infrastructure and public services. Consumption differential is increasingly serious.As the momentum of economic growth, the insufficient domestic demand embodied by urban and rural consumption differential has caused the great attention of the government; urban and rural ’s consumption duality is increasingly attracting the vision of the society from all walks of life. From the perspective of social stability, narrowing the differential between urban and rural consumption is helpful to improve the welfare of the rural residents, and asset social fairness and justice, and enhance people’s happiness; for the thinking of economic development, the promotion of the consumption level of rural residents is useful to release the domestic demand to consume domestic excess capacity, which results in driving the economy growing again. Therefore, the research for consumption differential between urban and rural areas, as well as rural internal consumption differential, has important realistic meaning and policy implications.From the perspective of urban and rural duality, based on the CHFS in 2011 national survey of micro data, this article exploits the quantile regression methods to analyze the impact factors of consumption differences between urban and rural households, as well as rural domestic households. This paper investigates particularly income, education, asset, age, social security contributions among the factors; and confirms the existence of implicit duality; the implicit factors’ contribution for consumption difference between urban and rural.The article is divided into six chapters. The research is going on according to the train of thought that observing phenomenon- reviewing literature- questioning-solving problems. Chapters are arranged as following:The first chapter introduces the research background and the research object of this thesis by the overall comparison of urban and rural consumption level within macro and micro data firstly. And the following is the research significance of this article, writing path and logical framework, empirical methods and main innovative points in details.Chapter second reviews the native and broad literature. Firstly it introduces the development of the consumption theory in western economics, then sorts and summaries domestic and foreign research results in three parts. The first part displays the domestic scholar’s research content and statistical methods in details based on each phase during the evolution of economics theories of consumption. In the second part, it lists representative results of foreign scholars’ studies. The third part starts from domestic and foreign research achievements and shortcomings. Then combined with the Chinese characteristics of urban and rural environment and system arrangement, we divide the duality that attached social universal attention into "explicit" and "implicit" and gives the definition of implicit duality, and puts forward problems.The third chapter consists of empirical models and data description. Firstly we elaborate the mechanism of quantile regression model and Oaxaca-Blinder decomposition model, then constitute quantile decomposition model using anti-fact distribution. Secondly it illustrates the data used in the thesis and special treatment for them to make up the deficiency of the literature before.In the fourth chapter, based on the model set, we take urban and rural consumption and the variables into three models. Quantile regression results measure the effect caused by liquidity constraints and uncertainty for the differential of urban and rural consumption, verify the periodic characteristics of the consumption. Two decomposition models separate influence of explicit duality and implicit duality.The fifth chapter studies rural domestic consumption alone. All the significant variables for the consumption differential between urban and rural are classified into the scope of inspection to check if they are also the cause of rural domestic consumption differential.Chapter six summarizes research content and conclusions of the full text and expound the policy implications, and put forward corresponding suggestions.The main conclusions of this paper is as follows:1. The current income, social security, education level and assets, are the main impact factors of both urban and rural consumers’ decision. It confirms the function of liquidity constraints, uncertainty, permanent income on consumption. These variables greater influence on the rural household consumption which locate in low position of the distribution.2. According to horizontal and vertical decomposition of urban and rural consumption differential, we find that consumption differential between urban and rural households mainly comes from the dominant factors, and the recessive factor is the cause of the consumption differential’s change. 70.31% of the total consumption variance is derived from "explicit factors", and 29.69% comes from "implicit factors". The main reason of its decline is that the impact of "implicit factors" concluded urban and rural consumption environment, consumption development stage, consumption idea and habits is weakening.3. In view of the analysis results of consumption variance between urban and rural households, the paper gives several suggestions to narrow the differential. Firstly, it is important to revitalize the farmer’s land assets to increase the property income by taking advantage of land reform at present stage; secondly, in order to improve the metastatic income of farmers, the government should focus on increasing rural residents’ the basic social security coverage and depth and agricultural subsidies directly; thirdly, advocacy of participating in vocational education and encouragement to enter higher education for rural residents are useful to strengthen farmers’ income expectations from two aspects of expected salary and wage levels, which helps improve the salary income. In addition, it is needed to improve the rural household consumption environment, consumption idea, consumption stage of development through material transformation and consciousness infusion in the construction process of urbanization, which will do great contribution to offset the rural consumption barrier caused by implicit duality.