Primary Demand and Marginal Propensity for Consumption of Urban Residents with Different Income Levels

Expanding urban household consumption demands is an essential way to convert styles of economic development in China.So,illustrating the characteristics of urban residential consumption behaviors of different kinds of income levels is crucial for making consumption demand policies.This paper aims to analyze the primary demands,marginal propensity for consumption and impact factors of urban residents of different income levels,using the revised extended linear expenditure system with 38 items of consumption expenditure data from 2000 to 2009.The results demonstrate as following:1) for low and medium income levels,expense of primary demands in which food and clothing are predominate accounts for the large proportion of their disposable income,and marginal propensities to consume in residence,transportation and communication are obvious as well;2) for relatively higher income levels,major expense focuses on enjoyable consumption.Meanwhile,marginal propensities to consume in transportation,dining out,entertainments,durable goods for recreation and lodgings are significant;3) the fluctuation of prices of enjoyable goods affects both low and medium income levels much more than the relatively higher income level;4) the improvement of salary plays an important role in upgrading consumption patterns.Some targeted consumption-stimulating suggestions for different income levels are also proposed.