A positive study of China´s residents consumption function and factors

This paper gets an error correction model on China´s resident consumption and income by means of the cointegration analysis. The findings are as follows: 1) In a short term, there will be a negative correlation between demand and income in China, and town people´s short-term marginal propensity to consume is weaker than the long-term´s; 2) The case in the countryside is on the contrary. The influence of interest rate and town Gini coefficient on the town people´s consumption is insignificant. The influence of interest rate and rural Engel coefficient on rural people´s consumption is insignificant. At last, some suggestions are given based on the findings.