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                                  Does Transfer Income Promote the Upgrading of

                                      Rural Residents’ Consumption Structure?



                                              ZHOU Jiehong,LIANG Yuhu,JIN Yu

                       Abstract  The upgrading of the consumption structure of rural residents holds  significant impor⁃
                  tance for expanding domestic demand and enhancing the endogenous driving force and reliability of the
                  domestic circulation.Based on provincial panel data from 2000 to 2019,this paper utilizes the theories of
                  constant relative risk aversion utility function and Maslow’s hierarchy of needs to examine the impact of
                  transfer income on the upgrading of rural residents’ consumption structure and its underlying mechanism.
                  Furthermore,it analyzes the role of transfer income in narrowing the gap in consumption structure up⁃
                  grading.The results show that for every 1% increase in transfer income,the proportion of rural residents’
                  development-and-enjoyment-oriented  consumption  in  total  consumption  will  increase  by  2.6%. More⁃
                  over,as rural residents’ disposable income rises,the impact of transfer income on upgrading their con⁃
                  sumption  structure  will  gradually  diminish. Transfer  income  promotes  the  upgrading  of  consumption
                  structure  mainly  through  the  channels  of  reducing  the  share  of  household  consumption  expenditure  on
                  food,increasing the share of consumption expenditure on education,culture and recreation,and increasing
                  the share of expenditure on health care and medical services.Moreover,transfer income helps to reduce
                  the disparity in the degree of upgrading of consumption structure upgrading among rural residents with
                  different income levels and in different regions,particularly benefiting those with low to medium incomes
                  and those residing in the central and western regions.Therefore, this article proposes policy recommenda⁃
                  tions such as implementing differentiated transfer payment policies,strengthening support measures for
                  vulnerable groups,and expanding the supply of rural residents’ consumption to promote the upgrading of
                  their consumption structure.
                       Key  words  rural  residents;  upgrading  of  consumption  structure;  transfer  income;  consumption
                  gap

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