Abstract:From the perspective of the source of peasants income, using the data about fiscal expenditure for agriculture and per capita net income of peasants from 1985 to 2015, based on VAR model and VEC model, this paper makes an investigation on the effects of fiscal expenditure for agriculture on rural income growth in the long run and short run by means of co integration test, impulse response functions, variance decomposition and some other methods. The results show that in the long run, fiscal expenditure for agriculture has a positive but weak effect on the rural per capita net income, in which there are differences on the effect of four kinds of rural income, which are wage income, household operating income, transferred and property income. Fiscal rural expenditure has stronger impact on rural wage income, transferred and property income, but a weaker effect on rural household operating income. In the short run, fiscal expenditure for agriculture has a positive and stronger effect on rural household operating income, transferred and property income, while a weak and negative impact on rural household operating income. Moreover, there exists a time lag difference in the effect of fiscal expenditure for agriculture on the rural income of different sources. There is no time lag difference in the growth of rural transferred and property income, while there is time lag difference in the growth of rural household operating income and wage income.