STUDY ON THE INFLUENCE OF PUBLIC SERVICE SUPPLY ON RESIDENT CONSUMPTION: A CASE OF CHINA

Xiong Xing

School of Economics, Chongqing Technology and Business University, Chongqing, 400067, China.  Email：xiongxing2019@ctbu.edu.cn

Jacinta Dsilva

School of Business, University of Balamand Dubai, UAE. Jacinta.dsilva@fty.uobd.ac.ae

Abstract: This paper investigates the influence of public service on consumption, public service has two influences on consumption: the income effect distribution and substitution effect in China. We firstly evaluate the public service level of 31 provinces in China by using the entropy-weight TOPSIS method, and then construct a regression model to demonstrate the impact of public service on residents’ consumption, urban residents’ consumption, rural residents’ consumption and the gap between urban and rural residents’ consumption. The study found that the improvement of public services has a significant positive effect on consumption, but the impact on urban residents and rural residents is different, the positive effect on consumption of urban residents is higher than that of rural residents, and public services have a positive effect on narrowing the gap between urban and rural residents’ consumption.

Key words: Public service; Household consumption; Public expenditure; TOPSIS