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Urbanization And Rural–Urban Consumption Disparity: Evidence From China

Author

Listed:
  • JING LI

    (Department of Geography and Resource Management, The Chinese University of Hong Kong, Shatin, N. T., Hong Kong)

  • TSUN SE CHEONG

    (#x2020;School of Business, Hang Seng Management College, Hang Shin Link, Siu Lek Yuen, Shatin, N.T., Hong Kong)

  • JIANFA SHEN

    (Department of Geography and Resource Management, The Chinese University of Hong Kong, Shatin, N. T., Hong Kong)

  • DAHAI FU

    (#x2021;School of International Trade and Economics, Central University of Finance and Economics, 39 South College Road, Haidian District, Beijing, P. R. China)

Abstract

The objective of this paper is to investigate the impacts of urbanization on influencing the rural–urban consumption disparity in China, a research gap which has not been bridged so far. Adopting a provincial dataset from 1997 to 2014, a generalized method of moments (GMM) estimator is employed to reveal the impact of urbanization on the ratio of per capita consumption expenditure of the urban households to the rural households, along with other socioeconomic variables. Empirical results show salient relationship between increasing urbanization ratio and declining rural–urban inequality. Significant impact of education costs on increasing the rural–urban inequality is also observed. Other factors that increase the disparity include foreign investment and gross regional product (GRP) indices. Industrial structure, costs of housing and health care are insignificant factors. The results of this study help in understanding China’s new urbanization development strategy in a better way.

Suggested Citation

  • Jing Li & Tsun Se Cheong & Jianfa Shen & Dahai Fu, 2019. "Urbanization And Rural–Urban Consumption Disparity: Evidence From China," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 64(04), pages 983-996, September.
    • Handle: RePEc:wsi:serxxx:v:64:y:2019:i:04:n:s0217590817450102
    DOI: 10.1142/S0217590817450102
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