Analysis of the Impact of Digital Finance Development on Household Consumption of Urban and Rural Residents in China

-- Microscopic Evidence from Chinese Families

Abstract

In recent years, China's digital finance has developed rapidly, profoundly changing the way residents live and consume. Especially in the context of China's Urban-rural dual economic structure, the impact of digital finance development on urban and rural household consumption is significantly different. The dual structure of urban and rural areas and the development model of financial efficiency and fairness have led to the imbalance between urban and rural development in China's financial system. Many economically backward rural areas have lagged behind in financial development. Digital finance has expanded the coverage and service scope of Inclusive Finance, and changed people's lifestyle and consumption habits. Realize the docking of consumption willingness and consumption capacity. Narrow the gap between urban and rural consumption. The study shows that the development of digital finance has significantly increased the consumption level of urban and rural households, but overall the impact on the consumption of urban households has been greater. Specifically, the depth of use of digital finance has a greater impact on the household consumption of urban residents, and the breadth and degree of digital financial coverage have a greater impact on the consumption of rural households. Further research found that there are differences in the impact mechanism of digital financial development on household consumption of urban residents and rural residents: The development of digital finance mainly promotes the consumption of urban households by increasing residents' incomes and reducing the uncertain risks faced by households, and increases the consumption of rural households by facilitating payment and alleviating liquidity constraints.