Abstract: Measuring the Engel's coefficient of farmers is important in grain-for-green area. This paper collects the tracking data of Huining County and Anding District and then builds economic indicators with income, policy and family factors. These indicators reveal the differences of the Engel's coefficient in the two regions. The results show that:Firstly, due to the similar geographical location, the Engel's coefficient of Huining and Anding shows a similar trend of high fluctuation, which is mainly caused by the weak elasticity of consumer demand; secondly, the subsidy rate of the farmers has a significant negative impact on the Engel's coefficient in Huining. It shows that the macro policy has a significant effect on the economic life of local residents and implies the rule of fiscal transfer payment. However, the subsidy rate in Anding has a significant positive impact on the Engel's coefficient because of the subsidy accounts for a small proportion of household income; finally, the rate of grain-for-green plays crucial rule on the Engel's coefficient. It means that the main income of the farmers is derived from crop income. Our results have practical significance for achieving accurate poverty alleviation and rural revitalization.

Key words: Engel's coefficient, grain-for-green policy, rural households