Empirical Analysis on Contribution of Urban Resident Income Growth to Agriculture Development and Peasants Income Increase

Based on the data during the years 1978-2006,using cointegration analysis,Granger causality tests and impulse response function,this article studied the influence of urban resident income on the peasant income.It's found that the income of urban residents had positive effect on the income of peasant in short-term and long-term,which indicated that though income increase of towners has cake-cuttingeffect on peasant income,the more important is that it had a cake-makingeffect to drive the income increase of peasants.In addition,peasant income is an important variation affecting the future income of their own,which means that a self-promoting mechanism of keeping income increasing can be formed when peasant income reaches a certain level;on the contrary,when peasant income is at a low level,or the peasant falls into poverty by an accident,then he may be locked in a poverty.