Research on the Path of China Cities Service Consumption Upgrading

Shanghai Urban Construction Vocational College, Shanghai, 201415, China

e-mail: CJ0840@succ.edu.cn

Abstract

Based on the panel data of “first-line cities” and “new first-line” cities from 2006 to 2018, this paper constructs an extended linear expenditure system model (ELES) to empirically study the path law of service sub-consumption upgrade. Based on the full-sample OLS estimation, it is found that the overall marginal propensity for service consumption in the sample cities is 0.418, of which the sub-consumption propensity for cultural, entertainment and education services is the most obvious, followed by medical and health services, and transportation and communication services are the lowest. Based on service subconsumption, the research on price and income elasticity found that the expenditure and income elasticity of cultural entertainment and education, which has the most significant marginal propensity to consume, is the largest, while the price and income elasticity of health care services is the smallest. An empirical test based on sub-samples found that the marginal service consumption propensity of “first-line cities” and “new firstline cities” are 0.558 and 0.379, respectively; in terms of service breakdown, “first-line cities” have propensity to consume cultural entertainment and education services Significantly higher than the “new first-line cities”, the sub-item propensity to consume in medical and health services is slightly higher, and the sub-item propensity to consume in transportation and communication services is slightly lower.