Comparative Analysis on the Effects of Income Structure on Consumption Level of Rural Residents in Eastern and Western China: A Case Study on Jiangsu and Xinjiang Provinces

Taking Jiangsu and Xinjiang Provinces in China as examples, this paper analyzes the differences of income level, income structure and consumption level between eastern and western China. Since the reform and opening up, income of rural residents in eastern China has been much higher than that in western China. Income gap between eastern and western rural residents is increasing over time. Rural per capita net income in eastern area is mainly the net income from household management and the wage income. However, rural per capita net income in western area is relatively single, mainly the net income from household management. Living consumption of eastern rural residents is higher than the western rural residents and the gap is gradually widening. Four factors affecting the consumption level of rural residents in both eastern and western areas are discussed, which are natural environment, social culture, economic and technical level and policy system. According to the relevant data in the years 1993-2007, Regression Analysis Method is adopted to study on the effect of income structure on consumption level of rural residents in eastern and western China. Result shows that according to the structure of income sources, difference of consumption level between eastern and western areas is mainly caused by the difference of wage income; while differences of net income from household management and property transferred income have little effect on the difference of living consumption level. Based on this, relevant suggestions are put forward. On the one hand, western region should accelerate the promotion of urban-rural integration, make great efforts to develop secondary and tertiary industries in order to optimize the income structure of rural residents, and effectively improve the level of wage income of rural residents. On the other hand, eastern area should promote the coordinated development of three industries, and maintain the advantages in urbanization and industrialization levels.