Consumption Subsidies, Residents' Welfare and Industrial Support: Based on the Comparison of Efficiency of Various Consumption Subsidies

Abstract

This paper discusses the effects of cash subsidies, cash coupons and discount coupons on improving residents' welfare and supporting specific industries by constructing a theoretical model. The conclusion is that there is no difference between different subsidy methods when the amount of subsidy is small, and the efficiency of subsidy does not change with the amount of subsidy. On the contrary, cash subsidy is more conducive to improving residents' welfare, while consumption coupons are more conducive to supporting specific industries. Especially when the amount of subsidy is large, discount vouchers are better than cash vouchers in industrial support, while cash vouchers can improve residents' welfare more effectively than discount vouchers. This research contributes to the development of subsidy policies and seems to provide an explanation for the differences in consumption subsidy patterns and economic performance of governments around the world.