The Empirical Analysis of Difference of Urban-rural Residents' Marginal Propensity to Consume

The shortage of domestic consumption demand is always the structural bottleneck confronted by China's economic growth.By using econometric model,this paper tests the difference of marginal propensity to consume of China's urban-rural residents.The results show that the urban residents' marginal propensity to consume is greater than rural residents' marginal propensity to consume in China,but the urban residents' marginal propensity to consume tends to decline,while the rural residents' marginal propensity to consume tends to rise.The factor responsible for the change of urban-rural residents' marginal propensity to consume is as follows: there is a difference in terms of urban-rural income structure,consumption structure and consumption of consumer durables.In a nutshell,the key of spurring increase of China's consumption demand is to expand consumption demand of rural residents.