Title: Did China’s Rural Appliance Rebate Program Boost Household Appliance Consumption

Speaker:中央财经大学赵建梅教授

Host:Xiaoguang Chen, Associate Professor, RIEM

Time: 13:55-15:50, October 11, Friday

Venue: H513 Yide Hall, Liulin Campus

Abstract:This article investigates the effectiveness of “Rural Appliance Rebate” (RAR) program undertaken by Chinese government to boost rural appliance consumption since the end of 2007. Using two years household survey data, we adopt a semi-parametric difference-in-difference (DID) matching approach to assess the extent to which the rebates induced more rural appliance consumption than they otherwise would have. The empirical evidence from rural china indicates that although RAR program does not impose significant impacts of on the purchase of subsidized home appliances, we find a modest but significant impact on the purchase of subsidized home appliances during the same period, which reflects greater consumption increments on subsidized home appliances in program provinces. We conclude that RAR program boosts rural household consumption on subsidized home appliance slightly during the latest economic recession, at least in short-run. Our evaluation on china’s RAR program provides additional evidence and guidelines for fiscal policy designs in developing countries.