The 70th Xi Xian Forum, sponsored by the Center for International Cooperation and Disciplinary Innovation of Income Distribution and Public Finance at the Zhongnan University of Economics and Law (ZUEL) and the university's School of Public Finance and Taxation, was successfully held on December 20, 2024, in Wenqin Building's Conference Room 119. Associate Professor Song Ze from the School of Economics at Nankai University was the keynote speaker for this academic forum, delivering a lecture titled "The Extensive and Intensive Margins of Consumer Demand in Transition—Based on the Perspective of Market Accessibility." The forum was moderated by Professor Ye Jingjing from the School of Public Finance and Taxation. The forum attracted dozens of participants, including researchers Lin Jiada, Zou Wei, Zou Jianwen, and Wan Qian from the Center for International Cooperation and Disciplinary Innovation of Income Distribution and Public Finance.
During the forum, Song Ze highlighted that household consumption in China has shifted from a focus on quantity to an emphasis on quality. To understand the changes in household consumption quality and welfare during this transition, Song Ze introduced the concepts of extensive and intensive margins into the analytical framework of consumption growth, investigating how market accessibility affects consumption from a household perspective. In addition, Song Ze constructed a simple model using an indicator function, demonstrating that increased market accessibility will reduce fixed costs for businesses, attract more businesses to competition, and ultimately lead to lower competitive prices in the market.
Moreover, Song conducted the measurement of market accessibility indicators and employed the derived values for regression analysis, leading to the following conclusions: First, an increase of 1% in market accessibility will bring out a 1.56% growth in total consumption expenditure, with food and service consumption rising by 3.3% and 2.2% respectively; second, the contribution rate of the extensive margin to expenditure growth is up to 21.5%, with the rates of contribution to food and service expenditures being 13.8% and 12.9% respectively, and regarding the intensive margin, a 1% increase in market accessibility will lead to a 1.32% rise in the unit value of rice, while the unit values of pork, beef, and lamb will increase by 1.76%, 1.53%, and 2.99% respectively; third, increased market accessibility will reduce the time families spend shopping and the prices of purchased goods, while the increase in demand resulting from lower prices will stimulate business investment, promoting growth in net profit for enterprises. This growth will ultimately lead to an increase in average wages for employees, resulting in a rise in household income, thus boosting consumption expenditure and creating a virtuous cycle.
Song Ze delivered a captivating speech that not only engaged the audience but also sparked thoughtful reflections among the attending faculty and students regarding household consumption. During the discussion segment, participants actively contributed their insights, engaging in a broad and in-depth exchange on topics such as inter-city market accessibility and the structure of household consumption.
Guest Profile
Song Ze, who holds a PhD in Economics from Hunan University, is currently an Associate Professor at the School of Economics at Nankai University. His primary research interests are household consumption, social insurance, and applied microeconometrics. He has led and participated in various projects funded by the Ministry of Education's Youth Fund for Humanities and Social Sciences, the National Social Science Fund of China, and the National Natural Science Foundation of China. In addition, he has published over 10 papers in prominent academic journals, both in Chinese and English, such as Economic Research Journal, China Economic Quarterly, Journal of Financial Research, Economic Modelling, and Health Systems & Reform.