Understanding China's urban consumption patterns: new estimates and implications

Gu, Xin, Zhou, Zhang-Yue, and Wu, Yan-Rui (2019) Understanding China's urban consumption patterns: new estimates and implications. The Singapore Economic Review, 64 (4). pp. 961-981.

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Potential demand for consumer goods and services is enormous in China. Turning such potential into real effective demand will play a crucial role in sustaining China's future economic growth. Based on most recent consumption data of major categories of goods and services by consumers of different income groups, this study empirically evaluates the potential of the market for goods and services in China using the panel data of 18 provinces over the period 2002-2012. The results indicate that (1) compared to developed countries, Chinese urban residents have much potential for consuming goods including medical care, transportation and communication, education and entertainment; (2) the profile of the expenditure elasticity for necessities such as food change is hump-shaped. Residents in middle-income groups are more income-elastic than the low-and high-income groups; (3) expenditure elasticity of medical care decreases as income level rises, while the trends of transportation and communication, education and entertainment share a similar profile across income groups.

Item ID: 61735
Item Type: Article (Research - C1)
ISSN: 1793-6837
Keywords: China, consumption patterns, expenditure elasticity, income levels, Urban households
Copyright Information: © World Scientific Publishing Company
Funders: National Natural Science Foundation of China (NNSFC), Fundamental Research Funds for the Central Universities (FRFCU)
Projects and Grants: NNSFC Grant No. 71873029, FRFCU Grant No. 2242018S20039
Date Deposited: 06 May 2020 01:12
FoR Codes: 38 ECONOMICS > 3801 Applied economics > 380118 Urban and regional economics @ 100%
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