A comparison of relations between transportation and communication consumption of China's urban and rural residents and their income (An empirical analysis based on data between year 1994 and 2010)

Transportation and communication consumption is an important manifestation of consumption structure upgrading. After conducting a statistical analysis and comparison of the relationship between transportation and communication consumption by urban and rural residents from 1994 to 2010 and their income, and based on Keynesian theory of absolute income and consumption, consumption models are built between per capita consumption expenditure of transportation and communication by urban (rural) residents and the per capita disposable income between the Gini coefficient of urban and rural residents' income and the average propensity to consume of transportation and communication. Through a comparative analysis, it is thought that the average income of China's urban and rural residents is still at a low level, that income constraints have an obvious role of restraining transportation and communication consumption by residents, especially rural residents; with the expansion of the internal income gap between urban and rural residents, both their average propensities to consume for transportation and communication go up, while that of rural residents rise much higher than that of urban residents, which is not consistent with the law described by Keynes that the larger the income gap, the smaller the average propensity to consume. This is the reason for a representation of the macroeconomic reality that there is a low level of per capita income of urban and rural residents and the situation is more serious in rural areas. Finally, some policy recommendations were put forward.