Study On The Influence Of Income Inequality On Rural Household Consumption

Consumption is the endogenous engine driving economic growth.However,for a long time,the consumption of Chinese residents has presented the overall downturn and structural imbalance.Therefore,expanding domestic demand and improving consumption have become the key direction of economic development in recent years.As income is the premise and basis of consumption,the continuous expansion of income inequality will not only affect economic operation and social stability,but also affect the overall consumption of resident families through the psychological desire of status seeking motivation.Compared with urban residents,the consumption potential of rural residents is large,but the consumption intention is low.This article thinks that this has something to do with the widening of the income gap between rural residents’ families.Therefore,it is of great significance to analyze the impact of income inequality on rural household consumption and explore its mechanism.Based on this,this paper takes the data of China Household Tracking Survey(CFPS)in 2018 as the support,takes rural households as the research object,fully considers the externality and relativity of consumption,and empirically examines the impact and mechanism of income inequality on rural household consumption.To be specific,this paper firstly combs domestic and foreign literature related to income inequality and household consumption,analyzes the impact logic and internal mechanism of income inequality,and proposes corresponding research hypotheses to build a theoretical framework for subsequent empirical tests.Then,the least square method(OLS)regression model was used to empirically analyze the impact of income inequality on the consumption level and consumption structure of rural households,as well as the differences among households in different income groups,age groups and regions.Finally,from the perspective of status seeking,this paper explores the intermediate mechanism of income inequality on rural household consumption.The empirical research shows that:(1)From the baseline analysis results,income inequality significantly affects rural household consumption.With the increase of income inequality,the consumption level of rural households has been significantly inhibited.Compared with the consumption of enjoyment,income inequality has a greater impact on the consumption of subsistence type,followed by the consumption of development type,which hinders the upgrading of consumption structure.(2)From the results of mechanism analysis,status seeking motivation is the main way that income inequality affects the consumption of rural households.Rural households have the motivation to pursue upward social status and will reduce the current consumption expenditure in order to increase wealth accumulation and obtain more resources.(3)From the results of heterogeneity analysis,income inequality has the most obvious inhibitory effect on the consumption of high-income households,middleaged households and households in the eastern region of rural residents.(4)From other aspects,the personal statistical characteristics of the household head,family economic characteristics and regional characteristics will have a certain impact on the household consumption of rural residents.According to the above research results,this paper proposes to reduce the degree of income inequality and promote rural household consumption;Promote rational distribution of resources and increase household consumption power;Countermeasures and suggestions to improve the social security system and enhance farmers’ consumption willingness.