A Study on the Influence of the Income Structure on the Consumption Structure of Rural Residents in China

Yan Lu, Yuqi Zhou, Pengling Liu () and Shiyun Zhang ()
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Yan Lu: College of Economics and Management, Anhui Agricultural University, Hefei 230036, China
Yuqi Zhou: College of Economics and Management, Anhui Agricultural University, Hefei 230036, China
Pengling Liu: College of Economics and Management, Anhui Agricultural University, Hefei 230036, China
Shiyun Zhang: College of Economics and Management, Anhui Agricultural University, Hefei 230036, China

Sustainability, 2022, vol. 14, issue 16, 1-13

Abstract: The gentle development of the economy is an important link to realize sustainable development in a holistic way. In recent years, due to the notable decline in the scale of exports and investment, China’s economic growth has decreased significantly, and consumption has become the main force driving economic growth. Promoting sustainable economic development is an important problem in the current development of China. In this study, the ELES model was adopted to analyze how the consumption structure is affected by the income structure among rural residents in China. The results show the following: (1) The income structure of rural residents has a significant impact on the consumption structure, and their consumption behaviors conform to the “mental accounting” hypothesis. (2) Net property income and net transfer income account for a small proportion, but marginal propensity to consume (referred to as MPC) is relatively large. Net operating income and wage income form a large proportion of disposable income with low MPC. (3) In the future, expenditures on food, tobacco, and alcohol will slow down remarkably, and more money will be spent on healthcare, transportation and communication, and housing, forming an increasing proportion of expenditures. In summary, this study suggests that scientific and effective policy measures should be issued to boost the income level of rural residents in a targeted manner, optimize the income structure, and improve the rural consumption environment, so as to comprehensively promote rural consumption.

Keywords: Chinese rural residents; income structure; consumption structure; ELES model; influence (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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