The Effects Of Public Financial Subsidies On Durables Consumption

Consumption is one of the most important parts in the national economics. Besides, consumption is also the best way to improve economics. In China, the most important way to improve economy is investment, net export and government expenditure. Consumption includes resident consumption and governmental consumption. In order to make economy sustainable, it is necessary to increase the part of consumption in GDP.In this paper, we use rural household panel data from2000to2011, and we also adopt Based-corrected Matching Estimator method to study the effects of Jiadian Xiaxiang. The study indicates that Jiadian Xiaxiang did stimulate the rural household consumption by12.6%to29.3%. The result of study also means that JiadianXiaxiang, this policy, can have an obvious effect on durables consumption in rural China. What’s more, public financial subsidies on certain commodities indeed can improve the development of the whole national economics.