People's Livelihood Fiscal Expenditure and China's Urban-Rural Resident's Consumption based on Chinese Provincial Panel Data

This paper applies the provincial panel data from 1995 to 2011 of our country to analyze urban and rural residents' consumption,people' livelihood fiscal expenditure,non- people' s livelihood expenditure,income gap between urban and rural residents and inflation rate using PVAR method. The results show people's livelihood fiscal expenditure has crowding- in effects on urban and rural residents' consumption,and the contribution rate is significant,and whether non- people's livelihood fiscal expenditure has crowding- in effects or crowding- out effects is uncertain. Therefore,increasing the ratio of people's livelihood expenditure item in fiscal expenditure has positive influence on promoting urban and rural residents' consumption; people's livelihood fiscal expenditure has dramatic effect on increasing the rural residents' consumption and decreasing the income gap between urban and rural residents; when facing the inflation ratio changes,fiscal expenditure policy usually lags.