Abstract: There are greater differences between the marginal expenditure shares of all kinds of consumer goods used by China’s rural residents. The marginal expenditure share of the consumer goods which meet their basic survival needs, such as food and clothing, is less than 1; while marginal expenditure shares of the other six categories of consumer goods is greater than 1. Judging from the expenditure elasticity, the consumption structure of China’s rural residents is being gradually improved and has fundamentally changed. The ratio of the survival consumption is decreasing and the development consumption has become the major means to raise the welfare of rural residents. Therefore, while further striving to increase the income of rural residents, the subsidy policies like home appliances and cars sold at favorable prices in the countryside should be expanded, so as to promote the upgrading of consumption structure of rural residents. Besides, the expenditure elasticity of such expenditures as transport, communications, education, culture and recreational services shows a change of inversed U type along with the income distribution, which can greatly improve the shortcomings of the traditional demand system that can only fit linear changes, and profoundly enrich the understandings of the consumption structure as well.

Key words: rural consumption; demand system; AIDADS; rank test