Analysis of Residents' Consumption Structure of Gansu Based on the Expended Linear Expenditure System
Zheng Wen Yue
Abstract
Zheng Wen Yue
Abstract
This paper makes an empirical analysis of the dynamical change of the consumption structure of rural residents in Gansu Province by using ELES model.The results indicate that the consumption structure has improved,but it has still not made a fundamental change,and the rural residents' marginal propensity to save is still high.The basic consumption demand increases greatly,but the low-income households and lower-and middle-income households have not reached the basic consumption demand;the higher the living standard of rural residents,the greater the income elasticity of demand it will be.The increase of food price will greatly affect the demand for other products.
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This paper makes an empirical analysis of the dynamical change of the consumption structure of rural residents in Gansu Province by using ELES model.The results indicate that the consumption structure has improved,but it has still not made a fundamental change,and the rural residents' marginal propensity to save is still high.The basic consumption demand increases greatly,but the low-income households and lower-and middle-income households have not reached the basic consumption demand;the higher the living standard of rural residents,the greater the income elasticity of demand it will be.The increase of food price will greatly affect the demand for other products.
Key concepts: Marginal propensity to consume, Income elasticity of demand, Consumption (sociology), Agricultural economics, Economics, Marginal utility, Normal good, Rural area