Digital financial capability and household consumption: evidence from China

Defeng Meng

Applied Economics Letters, 2024, vol. 31, issue 11, 1014-1018

Abstract: Utilizing the 2017 China Household Finance Survey (CHFS) data, we design a novel multidimensional index of consumers’ digital financial capability (DFC) and find that consumers’ DFC significantly and positively influences their total household consumption and the proportion of online consumption. Our analysis reveals consumers’ DFC impacts household consumption through mediating channels, i.e. easing credit constraints and promoting online shopping, information search, and social interaction. Overall, it is beneficial for consumers to enhance their DFC, not only their financial literacy, to better use digital financial services to improve their financial well-being in the digital era.

Date: 2024
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DOI: 10.1080/13504851.2023.2167915

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