The Research Of Relationship Between Public Investment In Rural Areas And Farmers’ Consumption

Since the beginning of the new century, the problem of agriculture, countryside and farmerbecomes the central issue among the whole community. Since2006, Chinese government startsthe new rural construction based on the "economic development, to increase investment andimprove policies”. In the backdrop of the new rural construction, this article studies therelationship between public investment in rural areas and farmers’ consumption from atheoretical and empirical point. Before the theoretical and empirical research, the author brieflyintroduces the history and origin of China’s rural construction, and elaborates the importantsignificance of this study combining with the status quo of rural investment and consumption.Then the author studies the relevant domestic and foreign literature very carefully, after finishingthe literature review, the author carries out a detailed descriptive analysis of public investment inrural areas and the farmers’ consumption. Against the relationship between public investment inrural areas and farmers’ consumption, the author completes a theoretical derivation and anempirical test on the panel data of30provinces from the year of2003to2009. Based on theempirical results, the author comes to the conclusion of the public investment in rural areas havesignificant positive effects on farmers’ consumption, at the same time, the grouping test resultsindicate that there are differences between the different regions. Finally, the author puts forwardspecific policy recommendations combined with the conclusions of this paper.