Farmers' Income Quality And The Influence On Consumption And Investment

Three Rural Issues is a serious problem when China is in society transformation process. It is not only the constraint of society development, but also focus by public and priority in government. The key to solve Three Rural Issues is increasing farmers' income. However, farmers' income level is still low in China, which affects constructing a moderately prosperous society and rural economy growth in speed and health. Therefore, to measure the income level in accuracy and efficiency is precondition of improving farmers' income level. With the growth of economy, farmers' income level is no longer suitable to be measured by income quantity. Income quality provide a new method to evaluate income level by building a reasonable evaluation system. Both theory and practice shows that low income growth is a important factors to constraint economy growth. Low and middle income people which mainly consist of farmers have a huge potential contribution to economy growth under the background of economy growth slowing and domestic demand expansion needing. Thus, it is very important to research farmers' income quality effect on consumption and investment of farmers.On the foundation of existing research results, this paper discusses the calculation of farmers' income quality and its effect on consumption and investment of farmers in China. The paper consists of four parts.The first part is research basis by Chapter 1 and Chapter 2. This part includes research background, purpose, significance, literature reviews, definition, theoretical reviews and theory frames. The first part mainly designs research programme and raises a new concept: farmers' income quality. The second part is construction of farmers' income quality system and calculation of its index by Chapter 3 and Chapter 4. On the basis of research programme in the first part, Chapter 3 analyzes the differences between micro to macro in income quality research and selects 15 indicators to build the system. Confirmatory factor analysis proves the system is correct in build. On the base of farmers' income quality system, Chapter 4 collects 31 provinces annual data from 1997 to 2014 in China, calculates weights using Entropy Method and farmers' income quality index in every province by weighted linear complicated method. At the rest of Chapter 4, the paper uses normal cloud model to evaluate all provinces remark grade in 2014 by fuzzy evaluation. The third part, which concludes Chapter 5 and Chapter 6, is the empirical research to explore effects of farmers' income quality on consumption and investment of farmers. This part uses panel cointegration model, panel Granger causality, panel VAR model, panel linear regression model, panel threshold model and structural equation model to explore effects of farmers' income quality on consumption and investment of farmers on the base of farmers' income quality index in the second part and theoretical analysis. This part includes two aspects. The first aspect is Chapter 5, which discusses influences of farmers' income quality on consumption of farmers. It analyzes the impact of farmers' income quality and its dimensions on consumption, lag and threshold effects on consumption. The second aspect is Chapter 6, which discusses direct influences of farmers' income quality on investment of households. It analyzes the impact of farmers' income quality and its dimensions on investment, the threshold effects on investment, credit function in the impact of farmers' income quality on investment and modiator effects of credit rationing. The fourth part is a summary of this research which consist of Chapter 7 and Chapter 8. Chapter 7 provides a policy analysis from the view of increasing farmers' income quality driving consumption and investment of farmers through above. Chapter 8 summarizes research results, draws conclusions in concise words and addressed the research prospects.The paper draws main conclusions as follows.(1) Famers' income quality and its dimensions develop in imbalance. Famers' income quality presents great regional differences which infer that regional differences of farmer income are very serious phenomenon. The dimensions in famers' income quality differ a lot as the same. Considering parameter estimations in confirmatory factor analysis and average score of every dimension in comprehensive, income adequacy and income structure are more important. Other dimensions need paying attention.(2) Farmers' income quality and quantity have no good connection. The change of farmers' income quality in China shows growing in fluctuation and slowing in speed, whose trend is proper to economy growth. Farmers' income quality index in China presents a radial distribution that coastal and close regions are higher, border regions are lower and inlands regions in west are lowest. The majority of farmers' income quality index are moderate and under moderate. Famers' income quality has a large improvement space in China.(3) Famers' income quality has a significant influences on consumption of farmers in China. If famers' income quality increases 0.1 unit, consumption of farmers increase 1510.4 Yuan this year. In farmers' income quality dimensions, income adquacy, income structure, income growth and income knowledge have significant influences on consumption but income cost is not. There exists an obvious inertia in the cunsumption of farmers in China. There are cointegration and mutual cause-effect relationships between farmers' income quality and consumption of farmers. If famers' income quality increases 1 unit, consumption of farmers increase 0.3058 unit next year and decrease 0.2588 unit in the year after next. Famers' income quality has threshold effecs on consumption of farmers. The threshold value is 0.4508. If consumption of farmers in China needs breakthrough growing and becomes new driving force of economic growth, Famers' income quality improving is foundation.(4)Famers' income quality has a significant influences on investment of households in China. If famers' income quality increases 0.1 unit, consumption of farmers increase 489.3 Yuan next year. All demensions of farmers' income quality have significant influences on investment of households. Famers' income quality has threshold effecs on investment of households. The threshold value is 0.3464. Credit rationing is the key modiator effect of that farmers' income quality influences investment. The direct impact of farmers' income quality on investment of households is larger than the indirect impact, whose path coefficients are 0.3542 and 0.2635, respectively. Increase of farmers' income quality is a core factor of improving investment of households and rural economy growth.