| Abstract | Aimed at the rural-urban inflation data feature and based on the economic restructuring, this paper tests the stability of rural-urban inflation difference using endogenous structural break ESTAR model to reveal the process of integration of rural-urban commodity market. The results show that the difference rural-urban inflation is stationary process which means that rural-urban commodity market has the integration trend, and the structural break is at 1994. Before 1994, the degree of market segmentation of Chinese rural-urban is bigger than that after 1994, the non-arbitrage interval of rural-urban commodity is wider and the speed of mean- reversion is slower than that after 1994. Therefore, rural-urban market Integration trend is more obvious after 1994. Transportation costs, Information costs, trade barrier explains the trend of urban-rural inflation convergence. These results show that the gradual elimination of rural-urban dual structure and the recently policy of promoting the coordinated development of rural-urban economic significantly promote the urban-rural economic integration process. |