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| Does Digital Financial Inclusion Significantly Influence Household Consumption? Evidence from Household Survey Data in China |
| YI Xingjian, ZHOU Li
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| School of Finance, Guangdong University of Foreign Studies |
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Abstract This paper makes a theoretical discussion and empirical test on the impact of the development of digital inclusive finance on household consumption. The conclusions show that: (1) The development of digital inclusive finance has significantly promoted household consumption in the sample period, and this promotion effect is more obvious in rural areas, in the central and western regions, and in the middle and lower income groups. At the same time, in addition to the coverage of digital inclusive financial development, the depth of use and its three sub-indicators: payment, insurance and money funds significantly promote household consumption. (2) Digital inclusive finance promotes the household consumption in the sample period mainly by easing the liquidity constraints and facilitating the payment of households. (3) Using the instrumental variable and replacing the data set with the estimation results of the Chinese labor force dynamic survey data prove that the results are robust and reliable. (4) The results of sub-sample regression of human capital differences show that the higher the education level of the head of household and the stronger the cognitive ability, the more obvious effect of digital inclusive finance on the household consumption in the sample period. (5) The development of digital inclusive finance significantly promotes consumption for clothing, housing, equipment supplies and services, transportation and other goods and services.(6) The sub-sample regression results of household debt-to-income ratio show that the development of digital inclusive finance only promotes the household consumption with low or medium debt-to-income ratio, while there is no the significant inhibitory effect on the consumption of high debt-to-income ratio households. The development of digital inclusive finance has indeed increased the debt-to-income ratio of households. Therefore, while actively promoting the development of digital inclusive finance, it is also necessary to beware of the excessive and over-growth of household debt.
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Received: 01 September 2018
Published: 21 December 2018
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