| Peer-Reviewed

The Trends of the Average Propensities to Consume and Urban-rural Consumption Inequality in China

Published in Economics (Volume 8, Issue 3)
Received: 4 December 2018     Accepted: 6 September 2019     Published: 24 September 2019
Views:       Downloads:
Abstract

As the average propensities to consume between urban and rural residents are different, the consumption inequality and the income inequality inverted-U curves are different in the process of urbanization (economic development). It shows urban-rural consumption inequality passes the turning point of the inverted-U curve during 2000 and 2002, which is about 4-6 years ahead of the urban-rural income inequality inverted-U curve. The urbanization rate (economic development level) of urban-rural consumption inequality is lower than that of urban-rural income inequality at their turning points, while the urban-rural consumption equality at its turning point is larger than the urban-rural income equality at its turning point. This paper argues that, on the premise that the urban-rural income inequality is certain, it can improve the actual welfare of residents by reducing the urban-rural consumption equality. The feasible measures may be increasing the residents’ (especially rural residents’) average propensity to consume.

Published in Economics (Volume 8, Issue 3)
DOI 10.11648/j.eco.20190803.14
Page(s) 114-127
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Average Propensity to Consume, Consumption Inequality, Income Inequality, Urbanization

References
[1] Chen zongsheng. (1991). Income distribution in economic development, Shanghai people’s publishing house, Shanghai sanlian bookstore.
[2] Chen zongsheng. (1994). “step trapezoidal variation of inverted-U curve”, economic research, no. 5.
[3] Chen zongsheng. (2000). income distribution, poverty and unemployment, nankai university press.
[4] Keynes, J. M. (1936), General Theory of Employment, Interest and Money, Harcourt Brace & Company.
[5] Duesenberry, J. S. (1949), Income, Saving and Theory of Consumer Behavior, Harvard University Press.
[6] Modigliani, F. & R. Brumberg (1954), “Utility analysis and the consumption function: An interpretation of cross-section data”, in: K. E. Kurihara (ed), Post-Keynesian Economics, Rutgers University Press.
[7] Friedman, M. (1957), Theory of the Consumption Function, Princeton University Press.
[8] Li guiqian. (2013). Price, income gap and consumer demand, journal of shandong normal university (humanities and social sciences edition), no. 4.
[9] Flavin, M. A. (1981), “The adjustment of consumption to changing expectations about future income”, Journal of Political Economy 89 (5): 974-1009.
[10] Lin wenfang. (2011). Analysis of the relationship between the consumption structure and income of urban and rural residents in county regions, statistical research, no. 4.
[11] Tian shufang. (2015). Grey correlation analysis of urban residents' income and consumption in anhui province, journal of hebei north university (social science edition), no. 1.
[12] Fang songhai Wang nong & Huang hanquan. (2011). Research on increasing farmers’ income and expanding rural consumption, management world, no. 5.
[13] Zhang qiuhui & Liu jinxing. (2010). Influence of Chinese rural residents’ income structure on their consumption expenditure behavior -- based on the panel data analysis from 1997 to 2007, China rural economy, no. 4.
[14] Hou Shian & Zhao Henan. (2012). Influence of the composition of income sources of urban and rural residents on their consumption behavior, journal of zhongnan university of economics and law, no. 6.
[15] Xu hui-qi & Li jingqiang. (2009) Effects of different income sources on rural residents’ consumption and countermeasures, economic horizon, no. 3.
[16] Fang fuqian & Zhang yanli. (2011). Analysis of marginal consumption propensity and changing trend of different income of urban and rural residents, finance & trade economics, no. 4.
[17] Zhou yunbo. (2009). Changes in urbanization, urban-rural gap and overall income gap across China -- empirical test of inverted-U shaped hypothesis of income gap, economics (quarterly), no. 4.
[18] Zhong yongjian & Xiao liang. (2007). Analysis on average consumption tendency and demand income elasticity of rural residents in China, rural economy, no. 1.
[19] Zhang zhiqiang. (2007). Empirical research on the average propensity to consume of urban residents in China - regression analysis based on logit transformation, contemporary finance and economics, no. 8.
[20] Cai derong, Wu qinqin & Wan jianyong. (2009). Empirical research on the influencing factors of the average propensity to consume of Chinese residents, consumer economy, no. 3.
[21] Hang bin. (2010). “why the average consumption tendency of urban residents continues to decline-an empirical analysis based on the formation of consumption habits”, journal of quantitative economy, technology and economic research, no. 6.
[22] Peng zhiyuan & Kang pi-ju. (2012). Research on the average propensity to consume of urban residents in China, journal of yunnan university of finance and economics, no. 1.
[23] Zhu Chen. (2012). The dynamic correlation between income and consumption gap between urban and rural residents-based on the empirical data from 1992 to 2009, financial science no.8.
[24] Peng dingyun & Chen weiyi. (2014). A study on income distribution based on consumption gap index, journal of zhongnan university of economics and law, no. 2.
[25] Wu di & Huo xuexi. (2010). An empirical study on the interaction between the consumption gap and income gap between urban and rural residents, agricultural technology and economy, no. 8.
[26] Zeng guoan & Hu jingjing. (2008). On the changes of China’s urban-rural income gap and its impact on the consumption level of urban and rural residents since the late 1970s, economic review, no. 1.
[27] Ao qin & Zheng xungang. (2005). Narrowing the income gap between urban and rural residents and expanding rural residents’ consumption demand, rural economy, no. 4.
[28] Liu jianguo. (1999). Analysis on the causes of low consumption tendency of farmers in China, economic research, no. 3.
[29] Tao chuanping. (2001). Causes and countermeasures of China’s sluggish consumer market, shandong social science, no. 5.
[30] Zang xuheng & Sun wenxiang, (2003). The consumption structure of urban and rural residents: a comparative analysis based on ELES model and AIDS model, journal of shandong university (philosophical and social science edition), no. 6.
[31] Tian qiusheng. (2001). Reasons for the shrinking consumer demand in China in the late 1990s, journal of lanzhou business school, no. 3.
[32] Zhong hong & Dai minle. (2006). Measures to increase consumer spending. China statistics, no. 4.
[33] Robinson, S. (1976), “A note on the U hypothesis relating income inequality and economic development”, American Economic Review 66 (3): 437-440.
[34] Rauch, J. E. (1991), “Economic development, urban underemployment, and income inequality”, Canadian Journal of Economics 26 (4): 901-918.
Cite This Article
  • APA Style

    Chen Zongsheng, Wu Zhiqiang. (2019). The Trends of the Average Propensities to Consume and Urban-rural Consumption Inequality in China. Economics, 8(3), 114-127. https://doi.org/10.11648/j.eco.20190803.14

    Copy | Download

    ACS Style

    Chen Zongsheng; Wu Zhiqiang. The Trends of the Average Propensities to Consume and Urban-rural Consumption Inequality in China. Economics. 2019, 8(3), 114-127. doi: 10.11648/j.eco.20190803.14

    Copy | Download

    AMA Style

    Chen Zongsheng, Wu Zhiqiang. The Trends of the Average Propensities to Consume and Urban-rural Consumption Inequality in China. Economics. 2019;8(3):114-127. doi: 10.11648/j.eco.20190803.14

    Copy | Download

  • @article{10.11648/j.eco.20190803.14,
      author = {Chen Zongsheng and Wu Zhiqiang},
      title = {The Trends of the Average Propensities to Consume and Urban-rural Consumption Inequality in China},
      journal = {Economics},
      volume = {8},
      number = {3},
      pages = {114-127},
      doi = {10.11648/j.eco.20190803.14},
      url = {https://doi.org/10.11648/j.eco.20190803.14},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.eco.20190803.14},
      abstract = {As the average propensities to consume between urban and rural residents are different, the consumption inequality and the income inequality inverted-U curves are different in the process of urbanization (economic development). It shows urban-rural consumption inequality passes the turning point of the inverted-U curve during 2000 and 2002, which is about 4-6 years ahead of the urban-rural income inequality inverted-U curve. The urbanization rate (economic development level) of urban-rural consumption inequality is lower than that of urban-rural income inequality at their turning points, while the urban-rural consumption equality at its turning point is larger than the urban-rural income equality at its turning point. This paper argues that, on the premise that the urban-rural income inequality is certain, it can improve the actual welfare of residents by reducing the urban-rural consumption equality. The feasible measures may be increasing the residents’ (especially rural residents’) average propensity to consume.},
     year = {2019}
    }
    

    Copy | Download

  • TY  - JOUR
    T1  - The Trends of the Average Propensities to Consume and Urban-rural Consumption Inequality in China
    AU  - Chen Zongsheng
    AU  - Wu Zhiqiang
    Y1  - 2019/09/24
    PY  - 2019
    N1  - https://doi.org/10.11648/j.eco.20190803.14
    DO  - 10.11648/j.eco.20190803.14
    T2  - Economics
    JF  - Economics
    JO  - Economics
    SP  - 114
    EP  - 127
    PB  - Science Publishing Group
    SN  - 2376-6603
    UR  - https://doi.org/10.11648/j.eco.20190803.14
    AB  - As the average propensities to consume between urban and rural residents are different, the consumption inequality and the income inequality inverted-U curves are different in the process of urbanization (economic development). It shows urban-rural consumption inequality passes the turning point of the inverted-U curve during 2000 and 2002, which is about 4-6 years ahead of the urban-rural income inequality inverted-U curve. The urbanization rate (economic development level) of urban-rural consumption inequality is lower than that of urban-rural income inequality at their turning points, while the urban-rural consumption equality at its turning point is larger than the urban-rural income equality at its turning point. This paper argues that, on the premise that the urban-rural income inequality is certain, it can improve the actual welfare of residents by reducing the urban-rural consumption equality. The feasible measures may be increasing the residents’ (especially rural residents’) average propensity to consume.
    VL  - 8
    IS  - 3
    ER  - 

    Copy | Download

Author Information
  • Nankai Institute of Economics, Nankai University, Tianjin, China

  • Party School of the Jiangxi Provincial Committee of CPC, Nanchang, China

  • Sections