This paper investigates the gap of demographic urbanization arising from the difference between rural residents who have migrated to cities and those who have acquired urban citizenship in the process of China's urbanization. The skyrocketing house prices and insufficient household consumption power are key factors to the widening gap, which had reached 18% in 2013. In order to explore this issue, by creating the basic model and the model with interaction term, this paper has analyzed the relationship among house prices, consumption power and gap of urbanization using the data of 31 provinces between 1999 and 2013 in China. Empirical result indicates that: there is a positive correlation between the house prices and the gap of China's demographic urbanization. However, such a correlation is restrained by these rural migrants who rent houses in cities. For an increase of house price by 1%, the gap of urbanization will widen by 1.05%. Although rising urban consumption power of rural residents has increased the ratio of migration, the lagged growth of consumption power has led to a widening gap of urbanization. Therefore, the only way to effectively reduce the gap of demographic urbanization is to increase the consumption power of migrant population and optimize consumption structure.
