The Research Of The Rural Residents’ Consumption Structure

After 30 years’reformation and transition in China’s economy, consumption has played the fundamental role in stimulating economic growth, and the significance of consumption theory research in the economic research is increasingly important. With the transformation of the planned economy to the market economy, the consumption structure of Chinese residents has also undergone tremendous changes. As a multi-angle, multi-level economic category, household consumption structure is an important part for the economic structure. It is not only the basis of macro-consumption structure, but also the most vital role in the micro-consumption structure, and the household consumption structure is closely linked to the industrial structure and the economic sustainable development. In addition, our country is still the urban-rural dual economic structure, and the 620 million rural residents in our country have the characteristics of low-income, less consumption, and subsistence consumption dominating the consumption structure. Therefore, the study of consumption structure of rural residents not just has the important theoretical value, but also meets the needs of guiding to optimize and upgrade the consumption structure of rural residents.Firstly, this essay concludes the development of the consumption theory, the methodology of studying consumption structure and the application of them. This conclusion of the relative theories and applications builds the theoretical and methodological basis of this study. Besides, the chapter 3 studies the rural residents’ consumption level and the consumption structure from the perspectives of the changes of consumption-income, the averaged propensity of consumption and the Engel Coefficient. The chapter 3 also dynamically analyses the changes of every major category of consumer items. This essay finds that although rural residents’ consumption level and consumption structure have been improved, the consumption structure is still in a relatively backward stage and should be upgraded further. Consequently, the following chapter 4 collects the data of the residents’income and consumption. In this part, the paper uses the ELES model to comparatively analyze the differences of the consumption structure between the urban and rural residents, and dynamically study the characteristics of the rural residents’consumption. Both the comparative analysis and the dynamic study are from the perspectives of the marginal propensity of consumption, the basic consumption and the demand elastic.Empirical results show that as the income of the rural residents increases, the marginal propensity to consume increases volatility. The basic consumer expenditure of all consumer items accounts for the actual expenditure has declined, in the mean while, the income elasticity of rural residents for subsistence consumption reduces gradually, and the focus of the consumption structure continues to development and enjoyment consumption, which indicates the upgrading trend of the consumption structure of the rural residents. However, the comparative study of urban residents demonstrates that there is a huge gap between the consumption structure of Chinese urban and rural residents. The proportion of consumption of rural residents in housing and other subsistence items is still quite high, while the ratio of development and enjoyment consumption is a bit low. The rural residents’ratio of the basic consumer expenditure to the actual consumer expenditure is higher than those of the urban residents, which shows the proportion of rural residents’consumption for basic survival is much higher than those of urban residents, and the income elasticity of demand of rural residents is generally lower than those of urban residents, but the price elasticity of rural residents is generally higher than those of urban residents. Therefore, we can conclude that the spending power of rural residents is limited, while savings motive is stronger and more vulnerable to liquidity constraints. In addition, the study also shows that at least 20%of the income of rural residents is unable to meet the basic needs of survival consumption, and the gap of income between urban and rural residents and among rural residents is significant, indicating that the problems of poverty and inequality remain severe.Based on the above theoretical and empirical research, in order to promote the upgrade of rural residents’consumption structure and the reduction of the gap between urban and rural residents, we propose the following policy recommendations:increase the income of rural residents and improve the consumption level of rural residents; consummate the social security system of rural residents and eliminate the worry of rural residents; accelerate infrastructure construction and improve the consumption environment of rural residents; expedite the reform of "supply side" of consumption to promote the speed of "Internet+" into the rural area; develop rural finance vigorously and reduce the liquidity constraints of rural residents’consumption; guide the changes in consumer ideas of rural residents and dig the huge potential of the rural market.