Next Article in Journal
Exploring Factors, and Indicators for Measuring Students’ Sustainable Engagement in e-Learning
Next Article in Special Issue
Sustainable Development for Small Economy and Diversification from a Dominant Industry: Evidence from Macao
Previous Article in Journal
Entering and Exiting: Productivity Evolution of Energy Supply in China
Previous Article in Special Issue
Measurement of Regional Green Economy Sustainable Development Ability Based on Entropy Weight-Topsis-Coupling Coordination Degree—A Case Study in Shandong Province, China
Article Menu
Issue 4 (February-2) cover image

Export Article

Open AccessArticle
Sustainability 2019, 11(4), 984; https://doi.org/10.3390/su11040984

Insufficient Consumption Demand of Chinese Urban Residents: An Explanation of the Consumption Structure Effect from Income Distribution Change

1
School of Management, China University of Mining and Technology, Xuzhou 221116, China
2
Center for Quantitative Economies, Jilin University, Changchun 130012, China
3
Business school of Jilin University, Jilin University, Changchun 130012, China
4
Mathematics school of Jilin University, Jilin University, Changchun 130012, China
5
Economics school of Jilin University, Jilin University, Changchun 130012, China
*
Author to whom correspondence should be addressed.
Received: 18 January 2019 / Revised: 1 February 2019 / Accepted: 12 February 2019 / Published: 14 February 2019
(This article belongs to the Special Issue Sustainable Economic Development: Challenges, Policies, and Reforms)
Full-Text   |   PDF [1930 KB, uploaded 14 February 2019]   |  

Abstract

China’s consumption rate has continued to decline since 2000, which has retarded the sustainable growth of China’s economy. The dramatic changes in China’s income distribution have been very significant social characteristics, and they are also a very important factor for consumption. Therefore, this study analyzes the problem of insufficient domestic demand from the perspective of the effects of the income distribution changes on the consumption structure. The Almost Ideal Demand System model is improved by relaxing its assumption that expenditure equals income and giving it a dynamic form that includes the three characteristics of the income distribution evolution (the mean, variance, and residual effects) and measuring these. The results show that the mean effect is the largest one, and it basically determines the size and direction of the total effect. The variance effect is much smaller, but it may have some positive effects on the individual markets. The residual effect is the smallest and has a certain randomness. The income gap is not the main cause of the insufficient domestic demand. It is more likely to be caused by the decline of the mean effect, and the main driver of this is the irrationality of the supply side and excessive housing prices. View Full-Text
Keywords: insufficient demand; income distribution change; demand structure effects; AIDS model; counterfactual decomposition insufficient demand; income distribution change; demand structure effects; AIDS model; counterfactual decomposition
Figures

Figure 1

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
SciFeed

Share & Cite This Article

MDPI and ACS Style

Su, P.; Jiang, X.; Yang, C.; Wang, T.; Feng, X. Insufficient Consumption Demand of Chinese Urban Residents: An Explanation of the Consumption Structure Effect from Income Distribution Change. Sustainability 2019, 11, 984.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics

1

Comments

[Return to top]
Sustainability EISSN 2071-1050 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top