Statistical Research On Impacts Of Price Volatility On The Welfare Of Rural Residents

China is an agricultural country with a large population, so solvingthe rural issues properly is one of the major tasks in the process of China’smodernization. Measuring the welfare level of rural people’s livelihoodreasonably is an important prerequisite for serving rural areas which hasimportant practical significance for China’s new rural construction. In addition,price volatility is an important factor affecting the welfare of the ruralpopulation. By studying the impact of price changes on the welfare of ruralresidents, the government can take advantage of reasonable pricing policy forrural residents to adjust the level of benefits, to effectively improve the welfarestatus of rural residents have a significant the theoretical and practical value.Based on the economic theory of the welfare of rural residents, this paperbuilt a statistical indicators index system for the welfare of rural residents inChina and then measured the welfare level of the rural residents using EntropyMethod. Thereafter, this paper analyzed the the impact of price changes on therural welfare based on panel data models and panel threshold analysis fromthree aspects which included consumption, production, sales and then measuredthe welfare loss of rural residents based on the Lucas utility theory.The dataused in this paper comes from China Statistical Yearbook, including data of31provinces in China from2003to2013,and the main conclusions are as follows:(1) This paper built a statistical indicators index system for the welfare ofrural residents in China, which includes five-level indicators namely the equityand consumption per capita income, health care level, the level of agriculturalproduction as well as educational and cultural level. The redundancy andcorrelation between the indexes is very low.(2) The importance of rural residents welfare indicators varied with theperiod, for example: the indicator with the maximum weight during 2005-2006is the level of health care, during2007-2009is the level ofprotection and After2010is the education and cultural level.(3) There exists the threshold effects in the effect of the CPI on thewelfare level of rural residents, that is, when CPI0.0002, the impact of theCPI changes on the welfare level of rural residents is negative which means thatthe society is in the period of deflation; when0.0002CPI0.0036, the impactis positive; and when CPI0.0036, the impact is negative and the coefficientis about-0.1415.(4) The changes of the price have a significant impact on the welfare ofrural resident, which is illustrated as follows:①That lagged average welfare of rural residents have a significant impacton the welfare of the average level of the income of rural residents, the impactfactor is about0.8.②Price changes in rural production have a negative effect on the welfareof rural residents and the coefficient is-0.18.③The current price changes of food commodities have no significanteffect on the welfare of rural residents, but the lagged price changes have apositive impact on the welfare of rural residents and the coefficient is about0.1.④Changes in interest rates have a negative impact on the welfare of theaverage rural residents, and the coefficient of about-0.03, namely: the interestrate for each one percentage point change will cause changes in the averagelevel of welfare of rural residents0.03percentage points.(5) The overall welfare losses exist significant differences among regions.In the eastern and western part of China, the overall welfare loss is smaller, butin the central and southwestern regions overall welfare loss is very large.