The Impact of Digitalization on Household Consumption based on the pathways of Income, Payment, and Liquidity Constraints: Evidence from China

Abstract

This study examines the impact of consumption digitalization on household consumption in China using micro-level data from the 2021 and 2023 China Household Finance Survey (CHFS). A two-way fixed effects model is employed to empirically analyze the relationship between consumption digitalization and household consumption behavior. The results indicate that consumption digitalization significantly promotes household consumption, suggesting that digital transformation plays an important role in stimulating consumption growth. Further analysis shows that consumption digitalization positively affects all seven categories of consumption expenditure, although the magnitude of these effects varies across different categories. These findings provide new empirical evidence and methodological insights into the role of digitalization in promoting household consumption and optimizing consumption structure.