Abstract In this paper, the mechanism of public transfer payments on household consumption is summarized from the theoretical level. Based on the data of Chinese household tracking survey from 2010 to 2018, a double-fixed effect panel model is constructed to estimate the effect of public transfer payments on household consumption, and the mediating effect analysis method is used to test the mechanism. The are following findings: The existence and the amount of the public transfer payment help to stimulate farmers to increase their consumption expenditure, and the effect on low-consumption families is more obvious, which can help alleviate the rural consumption inequality situation. Then, the public transfer payment will stimulate the rural consumption by increasing household per capita income, increasing the favorable income uncertainty, reducing the adverse income uncertainty and improving the internal income distribution in rural areas. And the coverage rate and the amount are equally important. Therefore, it will be helpful for the further release of the consumption potential of rural market that expanding the coverage of public transfer payments and improving their targeting, disbursement and stability.
2021, Vol. 38 
