Does Digital Financial Inclusion Increase the Household Consumption? Evidence from China

Wei Jiang (), Yanhui Hu and Hongjie Cao
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Wei Jiang: Qingdao University
Yanhui Hu: Jinan University
Hongjie Cao: Qingdao University

Journal of the Knowledge Economy, 2024, vol. 15, issue 4, No 67, 17333-17364

Abstract: Abstract Digital financial inclusion has emerged as a crucial means to enhance consumer consumption. This study utilizes provincial data from the China Household Finance Survey (CHFS) in 2017 and 2019, along with the digital financial inclusion index developed by Peking University, to investigate the impact of digital financial inclusion (DFI) on household consumption. Moreover, this research delves into the micro-level mechanisms through which DFI influences consumption. By examining these factors, we aim to shed light on the heterogeneous effects of DFI on households with varying consumption levels. The findings of this study provide compelling evidence that digital financial inclusion significantly benefits household consumption. Notably, the effects of DFI vary across different regions and consumption levels. Heterogeneity analysis reveals that DFI has a more pronounced impact on consumption in eastern and rural areas. Furthermore, at the individual level, digital financial inclusion is particularly conducive to the consumption levels of individuals under 60 years old and married individuals. Its promotion effect is achieved by increasing the proportion of household financial assets, improving residents’ financial literacy, and improving overall life satisfaction. Additionally, our analysis of moderating effects demonstrates that family social relations and family age structure positively influence the process. This paper holds significant implications for understanding and enhancing the promotion effect of digital financial inclusion on household consumption levels.

Keywords: Digital financial inclusion; Household consumption; Financial asset; Financial literacy; Happiness; Moderating effect (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s13132-024-01821-3

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