Xiaohua Wang, Li Liu

Author information

a College of Economics and Management & Postdoctoral Station of Statistics, Southwest University, Chongqing 400715, China

b Center for Research in Management, The University of Toulouse 1, Capitole, Toulouse 31042, France

E-mail: li.liu@iae-Toulouse.fr (Li Liu)

Abstract

Using cross-sectional data from 853 counties in 11 western China provinces, we employ quantile regression (QR) and instrumental variable quantile regression (IVQR) to investigate the hierarchical effect of fiscal expenditure and agricultural loan on rural residents’ income. We find: (1) the relationship between agricultural loan and income is consistent with the inverted U-shape (Kuznets curve); (2) the coefficient of quantile regression for rural residents’ loan gradually decreases; particularly, the impact on the high-income group is insignificant (at 0.90 quantile); (3) for 0.10 and 0.50 quantile, the increase of fiscal expenditure would hinder rather than promote income growth; (4) the restraining effect becomes more pronounced for the lower groups; in contrast, there is a significant positive relationship between income and fiscal expenditure for 0.90 quantile’s income group. Implications for government policy formulation are propounded accordingly.

Keywords

fiscal expenditure, agricultural loan, loan for rural residents, rural residents’ income, quantile regression

Cite this article

Xiaohua Wang, Li Liu. How County-Level Agricultural Loans and Fiscal Expenditure Impact Rural Residents’ Income in China——An Empirical Study of the Hierarchical Effect by Quantile Regression. Front. Econ. China, 2016, 11(2): 302‒320 https://doi.org/10.3868/s060-005-016-0017-4