The Effects Of Urbanization Level On Structure Of Residential Consumption

Nowadays,China is at the critical stage of economic transition,in which the form of economy moves forward to a more complex,more advanced phase.The speed of economic development is slower than before and it emphasizes quality and efficiency.At the same time,there are many problems,such as large gap in income;excess capacity;insufficient demand and structural imbalances.So each country should focus on solving these problems by learning from others in order to make economic situation better and more healthy.There are two analysis methods including theoretical analysis and empirical analysis to study the effect of urbanization on consumption structure.The theoretical part put urbanization and consumption-related theories together,then analyzing the mechanism of influence factors in different country and find the positive relationship between urbanization and consumption structure.At the base of international comparison,the empirical part collects the data of 31 provinces in China for the latest 10 years.The explanation variables are urbanization level;CPI;the degree of education background;regional production;FDI;volume of trade;fiscal revenue and rate of capital formation.And the dependent variable are two indicators of consumption structure,which are engel index and development index.The regression model and panel result shows that urbanization is significantly positive related to engel index and negative related to development index.Finally,the author puts up some political suggestions for the purpose of upgrading the consumption structure.Government should take effort to increase the income of residents and decrease the gap between country and rural area.Moreover,it can adjust the industrial structure to accommodate with the consumption structure.As for consumers,they should follow the right concept of consumption to adapt their income and the change of market.