Does residents’ digital capability affect households’ financial health? Evidence from the CFPS

Mingxian Li and Lu Zhang

China Agricultural Economic Review, 2025, vol. 18, issue 1, 161-180

Abstract: PurposeThis study aims to examine the impact and mechanisms of residents’ digital capabilities on household financial health and determine whether their effect differs across different families.Design/methodology/approachUsing the China Family Panel Studies Data and the fixed-effects model, this paper estimates how residents’ digital capabilities influence household financial health.FindingsThe study reveals that digital capabilities significantly improve household financial health through information welfare and livelihood diversification. Moderating effect analysis indicates that risk shocks activate the protective role of digital capability, mitigating adverse effects of risk shocks and enhancing household financial health. The heterogeneity analysis shows that the impact of digital capabilities is more pronounced among households with lower educational levels and those with middle-level financial literacy.Originality/valueThe paper constructs a household financial health index based on four dimensions, offering realistic support for achieving high-quality development of inclusive finance in China. It uncovers the intrinsic mechanisms through which digital capabilities affect household financial health, providing a theoretical foundation for the government to guide residents in the effective and rational use of digital technologies to improve household financial well-being.

Keywords: Digital capability; Household financial health; Information welfare; Livelihood diversification; Risk shocks (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:caerpp:caer-11-2024-0411

DOI: 10.1108/CAER-11-2024-0411

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