Empirical Study On The Influence Of Fiscal Agriculture Expenditure On Rural Residents’ Consumption

Investment, export and consumption are the three carriages in promotingeconomic growth. For a long period of the past years, investment and export haveplayed important role in the process of China’s booming economic development,providing a strong impetus for the rapid growth of GDP. However, since the globaleconomic crisis in2008, demands in the international market declined sharply, relateddomestic investment and export sectors have been blown severely, and economicgrowth rate fell sharply as well. So China’s economic growth model is in urgent needfor transformation from two wheel drive of investment and export to coordinateddevelopment of investment, export and consumption.Consumption is the ultimate goal of production activities as well as an importantmeans to guarantee sustained and stable economic growth. China is a largeagricultural country with rural residents accounting for a large proportion in totalpopulation, so raising consumption level of farmers will directly boost the overallconsumption level in China. Fiscal expenditure on supporting agriculture is one of theimportant means of national macroeconomic control and plays an important role inthe process of stimulating the consumption of rural residents. Therefore, it isnecessary to measure the impact of China’s fiscal expenditure for agriculture on theconsumption of rural residents in order to take targeted measures and give full play tothe positive effect of it so as to achieve the purpose of stimulating domestic demandand promoting economic growth.Accordingly, with Marxist Financial Thought, theory of financial expenditure andconsumption theory as the basis, by summarizing the current fiscal expenditure foragriculture and rural residents’ consumption status, this thesis carries out econometricanalysis concerning the impact of fiscal expenditure for agriculture on the ruralresidents consumption from the two aspects of total amount and structure respectively by adopting econometrics method. On this basis, it explores existing problems andtheir causes with respect to the impact of current fiscal expenditure for agriculture onrural residents’ consumption and puts forward corresponding policy recommendations,providing reference for the government to formulate relevant policies of fiscalexpenditure for agriculture in the future. First of all, the thesis defines basic conceptsand elaborates theoretical basis of the research such as Marxist financial thoughts, thetheory of financial expenditure and resident consumption theory, providing atheoretical basis for the thesis research. Secondly, the thesis elaborates fiscalexpenditure for agriculture and rural residents’ consumption situation from the twoaspects of the scale and structure respectively, offering a realistic basis for thefollowing analysis. Thirdly, it establishes a econometric model and analyzesshort-term and long-term effects of fiscal expenditure for agriculture on theconsumption of rural residents in China from the two aspects of total amount andstructure respectively by adopting the method of cointegration test, unit root test anderror correction model, and analyzes the reason for weak effect of fiscal expenditurefor agriculture on the consumption of rural residents from the aspects of the intensityof financial support for agriculture, policy tendency of financial support foragriculture, structure of financial support for agriculture, rural security system andrural residents consumption environment etc. Finally, based on the above research, itproposes to increase the intensity of fiscal expenditure for agriculture, optimize thestructure of fiscal support for agriculture, establish and perfect long-term policymechanism of fiscal expenditure for agriculture, establish and perfect rural securitysystem and improve the consumption environment of rural residents, providingreference for related policy making.