Recently, the paper Price Transmission and Fiscal Multiplier Effects of Consumption Subsidies, with Associate Researcher Shi Qichao from the Center for Economic Research as the corresponding author, has been published in Economic Research Journal. His co-authors are Zou Hong and Li Hujian from Southwestern University of Finance and Economics, and Sheng Qian from Zhongnan University of Economics and Law.

Against the backdrop of expanding domestic demand, China’s national subsidies for home appliances have become an important instrument to boost consumption. This study constructs a multi-firm price game model and evaluates the price transmission and fiscal effects of consumption subsidies using more than 16,000 observations of price, sales volume and other data of subsidized commodities. The results show that the prices of participating commodities drop by approximately 22% on average after subsidies, exceeding the nominal subsidy cap of 20%, meaning consumers fully capture the benefits. The price reduction stems from intensified price competition among firms; this effect is stronger in markets with low concentration, non-capped prices and new product launches. The subsidy policy also raises brand sales and corporate profits and accelerates market concentration toward leading firms, offering insights for optimizing subsidy design and expanding domestic demand.

Shi Qichao holds a PhD in Economics. He is an Associate Researcher at the Center for Economic Research, Shandong University. His main research interests include industrial organization, market design and experimental economics. He has long been committed to exploring the role of information in markets by combining theoretical and experimental approaches. His research has appeared in domestic and international academic journals including Economic Research Journal, Management Science, and Economics Letters.