Consumption Gap Between Urban and Rural Migrants: A Study Based on the Quantile Regression and Decomposition

Abstract

Based on the data of China Migrants Dynamic Survey in 2016, this paper uses the quantile regression and decomposition method to examine the consumption disparity between the urban and rural migrants. The empirical evidence finds that the consumption gap between the urban and rural migrants exists at each quantile of the distribution, and the effects of the characteristics covariates such as finance, demographics, mobility and employment on the consumption vary with the migrants’ positions in the consumption distribution and also differ between the urban and rural migrants. The differences in the characteristics account for 88.2% of the total consumption gap between the two groups. The consumption gap between the urban and rural migrants is higher at the middle and the top of the consumption distribution, and smaller at the low end of the distribution. The endowment effect increases at higher quantiles, while the coefficient effect decreases at higher quantiles. Keywords—urban migrants; rural migrants; consumption gap; quantile regression and decomposition