A Research On The Impact Of The Local Government Livelihood Expenditure On Rural Residents’ Consumption

Insufficient rural residents’ consumption demand for a long time is a source ofinsufficient residents’ consumption demand,so starting rural residents’ consumption isthe key to expanding domestic demand,while improving the livelihood issues of ruralresidents is the effective premise to promoting rural residents’ consumptioncurrently.The academia has a dispute whether the livelihood expenditure increased bygovernment has promote the rural residents’ consumption effectively,and there is lackof a comprehensive systematic research about livelihood expenditure and ruralresidents’ consumption.Basing on the above research background,this paper uses description of thestatistical method to analyse status of local government livelihood expenditure andrural residents’ consumption firstly,and then use macroeconomic theory to analyse therelationship between government livelihood expenditure and rural residents’consumption and its different types of ones from perspective of total and categoryexpenditures,and make empirical tests by constructing a panel econometric model andusing the panel data of Chinese31provinces from1998—2012.Theoretical analysisshow that livelihood expenditure has a crowding-in effect on rural residents’consumption in the current case of aggressive expansionary fiscal policy andagricultural tax relief etc. The size of various specific classification determines thedifferent level of crowding-in effect.And livelihood expenditure has a different impacton different types of rural residents’ consumption.Empirical results are asfollows:local government livelihood expenditure has promote rural residents’consumption effectively but this crowding-in effect is limited;education and healthexpenditures in2008—2012have a significant crowding-in effect on rural residents’consumption while the influences of culture and social insurance expenditure areweak relatively;the crowding-in effect on enjoyment consumption(mainly ineducation culture entainment and health care consumption)by livelihood expenditureis bigger than on basic survival one(mainly in clothing food shelter);education andculture expenditure have crowding-out and crowding-in effect respectively on ruralresidents’ education and cultural entertainment consumption,health expenditure has acrowding-in effect on rural residents’health care consumption.On the basis of theoretical analysis and empirical test,this paper put forward some relevant policy recommendations, such as growing proportion of livelihoodexpenditure in rural areas steadily, paying attention to optimize structure of livelihoodexpenditure,increasing rural residents’ income,in order to promote rural residents’consumption comprehensively and promote economy developing to domesticdemand-driven direction.