Distribution dynamics of China's household consumption upgrading

This paper studies the distribution dynamics of China's household consumption upgrading by using household survey data. The findings show that the consumption upgrading index is between 0.75 and 0.95 for most of the households. The convergence value of the rural households is much higher than their urban counterparts, and the rural-urban gap can be reduced in the future. However, urban poverty may exacerbate as our findings show that the urban households with consumption upgrading index around 0.63 would experience consumption downgrade. Turning to regional disparity, the western region in China would converge to the highest level of consumption upgrading index amongst the four regions, while the northeastern region would converge to the lowest level. The study suggests that consumption upgrading and development policy should pay attention to regional disparity, rural development, and urban poor, and the measures should be group specific. (c) 2021 Elsevier B.V. All rights reserved.