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Abstract: |
The work of “household appliances to the countryside” which promoted since February 1st, 2009, through paying the farmers who purchase household appliances to the countryside capital subsidy of 13% sales price by government's financial sector, reduces the price of household appliances and expands the rural consumption. The empirical study also suggests that household appliances’ income elasticity of demand higher than other goods and services, and the income effect is greater than others when subsidises them, which avoids the crowding out effect to other goods and services with increasing of household appliances’ consumption. Therefore, the policy of “household appliances to the countryside” is an effective policy tool to expand the rural consumption.
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