Research On Marginal Propensity To Consume Of Residents In China

The marginal propensity to consume of residents shows Changes in the consumptionwhen income changes, can indirectly measure distribution between income and consumption.Study of the marginal propensity to consume of residents of china will be better understandand recognize the intrinsic variation of residents’ consumption and develop more conducivepolicy the release of the residents’ consumption potential, all has important significance.In this paper, by comparing a large number the data draws the marginal propensity toconsume of residents in China conforms to the law of diminishing marginal propensity toconsume. But comparing the rural and small town, the marginal propensity to consume ofChina’s urban is higher than the rural’s. and is not in line with the rules. This may be related tospecial status of countryside. Many factors should be into consideration. This paper mainlydiscusses the structure of ownership, income distribution, social security influence.In the second chapter, from the basic concept of consumption theory, analyzes thedevelopment of consumption theory.In the third chapter, through a large number the data shows change of income andconsumption from reform and opening up. Then comparing the marginal propensity toconsume of China’s urban and the rural’s. In addition the third chapter also compares China’sper capita GDP and saving rate to some countries. It shows China’s per capita GDP is still abig gap compared with the developed countries, however, the saving rate is in the forefront ofthe world.The fourth chapter analyses why the marginal propensity to consume of our countryresidents is low. First of all, to calculate the proportion of public ownership economy frommany aspects. concludes that the proportion of public ownership economy and the marginalpropensity to consume of residents in China is negatively related. Secondly, also analyzes theoperating income, income distribution, the effect of social security system and other factorson the marginal propensity of consumption of residents in china.The fifth chapter give some suggestions of improving the marginal propensity toconsume of China mainly from the4aspects.They are reforming of political system,narrowing the income gap. Reforming enterprise, improving the social security system.