Study On The Influence Of The Local Government Fiscal Expenditure On Household Consumption

Since1990s, the ratio of consumption to falling has become the main structuralproblem in China’s ecomomic growth. At the same, our country all levels ofgovernments have promulgated a number of positive fiscal policy initiatives, hope thatthrough the proactive fiscal policy to stimulate consumption. Then, whether to increasefiscal expenditure will squeeze consumption, expenditure can stimulate the residentconsumption growth in the extent, and the effect of fiscal expenditure on consumptionof the government and the focus of attention.On the basis of research achievements at home and abroad, this paper makes adescriptive analysis of and a regional comparison between local governmentexpenditure and household consumption from both the national level and the regionallevel. More than that, on the basis of the empirical test on the relationship between localgovernment expenditure and household consumption from the national and the regionallevel respectively by using the established panel data model, the following basicconclusions are gained:First, China’s regional local government expenditure and resident consumptionincreased year by year, but the local government fiscal expenditure and residents. Theabsolute amount and growth rate were significant regional differences.Second, in various regions of our country local government expenditure andhousehold consumption was positively related, in addition to the western region of totalgovernment expenditure on household consumption did not affect the outside, otherregions are promoting effect on household consumption.Third, the regional economic expenditure in China are associated with positiverelationship between consumption, maintenance expenditure is difficult to have apositive impact on the consumer, has a crowding out effect on the eastern privateconsumption, to produce positive effect influence people’s livelihood expenditure onconsumption.Fourth, local fiscal expenditure on the eastern residents living consumptioncontributes a little, with inhibition of the Midwest; economic expenditure had obviouspromoting effect on the residents living consumption; the difference of economicdevelopment expenditures to the influence and the area, has a stronger effect onpromoting the eastern residents living consumption, the central region is relatively weak the western region, negative correlation; people’s livelihood expenditure has thecrowding in effect is significant to the residents living consumption.Fifth, local fiscal expenditure does not affect the residents of the west developmentof consumer, has a crowding out effect on the Middle East, economic expenditure onhousehold consumption in the development of a limited role, maintenance expenditurehas a significant role in promoting the development of resident consumption, people’slivelihood support to the residents of a big development of consumer action.Sixth, the promotion of local government fiscal expenditure policy include: theconsumer to appropriately control the scale of local government expenditure, stabilizingthe economic development situation; the fiscal expenditure structure optimization andadjustment of local governments, highlight the people’s livelihood finance; strengthenthe government’s goal of fiscal expenditure policy differences, enhance the feasibility;creating a good consumption environment, to improve consumer expectations.