Cultural Consumption Effect Analysis Of Local Government Expenditure In China

Since the implementation of the policy of reform and opening up to the outside world,China has achieved remarkable success on economic construction, however, Chinesehousehold consumption has been in a slump for the past many years, which severelycurtailed the sustainable development of our economy of China’s economy. The overallliving standards has reached a comfortably well-off level in China at the present stage,Household consumption has been upgraded from the past basic consumption (housing,clothing, transportation and communication) to cultural consumption for seeking spiritualneeds. Chinese cultural consumption has always been in a slump due to our special nationalconditions, which resulting in a low overall level of Chinese household consumption.Chinese government has started to implement a proactive fiscal policy to expand domesticdemand for this problem since1990s, but without much impact. Many scholars at home andabroad had in-depth extensive research on effects of government spending policy onhousehold consumption. But these scholars has never studied the government spendingpolicy effects of government spending policy on cultural consumption. This paper attemptsto explore and analysis the relationship between government spending and culturalconsumption with using the method of combination of theoretical analysis and empiricalanalysis.On the basis of previous related research, this paper come to a conclusion that the totaleffects of government spending policy on household cultural consumption is the sum of theweighted of two aspects of effects(crowding-in effect and crowding-out effect) with usingthe theory of government spending affecting cultural consumption. In the specific researchof the present situation of local government spending and of cultural consumption, it revealsthat there are large regional differences about the government spending and culturalconsumption. Therefore, this paper use the empirical analysis method to inquire into theregional differences of how the total amount and the structure of government spendinginfluence cultural consumption with advanced method of cointegration test of panel data and1993-2009data of30provincial-level administrative regions in China, the measurementresults show that: in addition to administrative expenditure, the total government spending,economic development spending and Science, Education, Culture and Public Healthspending have crowding-in effects on cultural consumption in national level; For differentregion, Apart from East, the total government spending have crowding-in effects on cultural consumption in Central and Western regions, economic development spending and Science,Education, Culture and Public Health spending also have crowding-in effects on culturalconsumption in all regions, but Science, Education, Culture and Public Health spending inEast region and economic development spending in West region have the best effects. Thispaper has made policy recommendations based on empirical analysis.