Research on the impact of digital economy on rural consumption upgrading: evidence from China family panel studies
Abstract
This paper examines the digital economy’s impact on rural household consumption upgrading. Existing studies remain mainly at the level of rural consumption scale and rarely address the consumption structure. The specific impact of the development of the digital economy on rural consumption upgrading and its mechanisms of action deserves in-depth study and consideration. We analyzed the related content using the fixed-effect model, the instrumental variable method (IV), the mediation effect model, and three-year panel data from the China Family Panel Studies (CFPS). This study found that, at the scale level, the digital economy contributes to expanding rural household consumption. At the structural level, the digital economy significantly increases the share of enjoyment-oriented household consumption but has no significant effect on development-oriented consumption. Income is an important transmission mechanism for the digital economy to improve rural household consumption. Besides, the impact of the digital economy on the upgrading of rural consumption varies according to income level and age.
First published online 23 August 2023
Keyword : digital economy, rural consumption upgrading, consumption scale, development-oriented consumption, enjoyment-oriented consumption
How to Cite
Zhou, Q. (2023). Research on the impact of digital economy on rural consumption upgrading: evidence from China family panel studies. Technological and Economic Development of Economy, 29(5), 1461–1476. https://doi.org/10.3846/tede.2023.19511
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Aron, J., Duca, J. V., Muellbauer, J., Murata, K., & Murphy, A. (2012). Credit, housing collateral, and consumption: evidence from Japan, the U.K., and the U.S. Review of Income and Wealth, 58(3), 397–423. https://doi.org/10.1111/j.1475-4991.2011.00466.x
Bahmani-Oskooee, M., & Maki Nayeri, M. (2020). Policy uncertainty and consumption in G7 countries: An asymmetry analysis. International Economics, 163, 101–113. https://doi.org/10.1016/j.inteco.2020.06.001
Boden, J., Maier, E., & Wilken, R. (2020). The effect of credit card versus mobile payment on convenience and consumers’ willingness to pay. Journal of Retailing and Consumer Services, 52, 101910. https://doi.org/10.1016/j.jretconser.2019.101910
Bommier, A., & Grand, F. L. (2019). Risk aversion and precautionary savings in dynamic settings. Management Science, 65(3), 1386–1397. https://doi.org/10.1287/mnsc.2017.2959
Choi, H., Lugauer, S., & Mark, N. C. (2017). Precautionary saving of Chinese and US households. Journal of Money Credit and Banking, 49(4), 635–661. https://doi.org/10.1111/jmcb.12393
Forman, C., Goldfarb, A., & Greenstein, S. (2005). How did location affect adoption of the commercial Internet? Global village vs. urban leadership. Journal of Urban Economics, 58(3), 389–420. https://doi.org/10.1016/j.jue.2005.05.004
Galí, J., López-Salido, J. D., & Vallés, J. (2007). Understanding the effects of government spending on consumption. Journal of the European Economic Association, 5(1), 227–270. https://doi.org/10.1162/JEEA.2007.5.1.227
Han, L., Liu, X., & Ma, S. (2023). The influence of uncertain expectations on Chinese rural residents’ consumer behavior decisions: Theoretical analysis and empirical test. Frontiers in Psychology, 13, 1052962. https://doi.org/10.3389/fpsyg.2022.1052962
He, C. Y., Qiu, W. S., & Yu, J. F. (2022). Climate change adaptation: A study of digital financial inclusion and consumption among rural residents in China. Frontiers in Environmental Science, 10. https://doi.org/10.3389/fenvs.2022.889869
Huang, H., & Zhang, Y. (2022). Digital inclusive finance and the development of sports industry: An empirical study from the perspective of upgrading the living level of rural residents. Frontiers in Environmental Science, 10. https://doi.org/10.3389/fenvs.2022.1033894
Huang, Q. H., Yu, Y. Z., & Zhang, S. L. (2019). Internet development and productivity growth in manufacturing industry: Internal mechanism and China experiences. China Industrial Economics, 377(08), 5–23. (In Chinese). https://doi.org/10.19581/j.cnki.ciejournal.2019.08.001
Khanal, A. R., Mishra, A. K., & Nedumaran, S. (2019). Consumption, habit formation, and savings: Evidence from a rural household panel survey. Review of Development Economics, 23(1), 256–274. https://doi.org/10.1111/rode.12536
Kuhn, P., & Mansour, H. (2014). Is Internet job search still ineffective? The Economic Journal, 124(581), 1213–1233. https://doi.org/10.1111/ecoj.12119
Li, H., Zhuge, R., Han, J., Zhao, P., & Gong, M. (2022). Research on the impact of digital inclusive finance on rural human capital accumulation: A case study of China. Frontiers in Environmental Science, 10, 936648. https://doi.org/10.3389/fenvs.2022.936648
Li, J., Wu, Y., & Xiao, J. J. (2020). The impact of digital finance on household consumption: Evidence from China. Economic Modelling, 86, 317–326. https://doi.org/10.1016/j.econmod.2019.09.027
Liu, G., & Chang, X. (2021). The impact of rising housing rent on residents’ consumption and its underlying mechanism: Empirical evidence from China. SAGE Open, 11(2). https://doi.org/10.1177/21582440211015709
Liu, T., Pan, B., & Yin, Z. (2020). Pandemic, mobile payment, and household consumption: Micro-evidence from China. Emerging Markets Finance and Trade, 56(10), 2378–2389. https://doi.org/10.1080/1540496X.2020.1788539
Marattin, L., & Salotti, S. (2014). Consumption multipliers of different types of public spending: A structural vector error correction analysis for the UK. Empirical Economics, 46, 1197–1220. https://doi.org/10.1007/s00181-013-0719-0
Nunn, N., & Qian, N. (2014). US food aid and civil conflict. American Economic Review, 104(6), 1630–1666. https://doi.org/10.1257/aer.104.6.1630
Son, J. C., & Park, H. (2020). The effects of regional house prices on consumption in Korea: Heterogeneous behaviors according to homeownership status and lifecycle stage. Sustainability, 12(9), 3517. https://doi.org/10.3390/su12093517
Suari-Andreu, E. (2021). Housing and household consumption: An investigation of the wealth and collateral effects. Journal of Housing Economics, 54, 101786. https://doi.org/10.1016/j.jhe.2021.101786
Rayna, T., & Striukova, L. (2021). Involving consumers: The role of digital technologies in promoting “presumption” and user innovation. Journal of the Knowledge Economy, 12, 218–237. https://doi.org/10.1007/s13132-016-0390-8
Riley, E. (2018). Mobile money and risk sharing against village shocks. Journal of Development Economics, 135, 43–58. https://doi.org/10.1016/j.jdeveco.2018.06.015
Song, Q., Li, J., Wu, Y., & Yin, Z. (2020). Accessibility of financial services and household consumption in China: Evidence from micro data. The North American Journal of Economics and Finance, 53, 101213. https://doi.org/10.1016/j.najef.2020.101213
Wan, J., Nie, C., & Zhang, F. (2021). Does broadband infrastructure really affect consumption of rural households? A quasi-natural experiment evidence from China. China Agricultural Economic Review, 13(4), 832–850. https://doi.org/10.1108/caer-12-2020-0303
Wang, Y., Zhou, Y., Yu, X., & Liu, X. (2021). Is domestic consumption dragged down by real estate sector? Evidence from Chinese household wealth. International Review of Financial Analysis, 75, 101749. https://doi.org/10.1016/j.irfa.2021.101749
Yang, B., Ma, F., Deng, W., & Yang, P. (2022). Digital inclusive finance and rural household subsistence consumption in China. Economic Analysis and Policy, 76, 627–642. https://doi.org/10.1016/j.eap.2022.09.007
Yang, W., Yang, P., Shi, H., & Sun, W. (2023). Mobile payment application and rural household consumption – evidence from China Household Finance Survey. Sustainability, 15(1), 341. https://doi.org/10.3390/su15010341
Yu, C., Jia, N., Li, W., & Wu, R. (2022). Digital inclusive finance and rural consumption structure – evidence from Peking University digital inclusive financial index and China household finance survey. China Agricultural Economic Review, 14(1), 165–183. https://doi.org/10.1108/CAER-10-2020-0255
Zhang, L. Y., & Ma, X. C. (2022). Analysis on the path of digital villages affecting rural residents’ consumption upgrade: Based on the investigation and research of 164 administrative villages in the pilot area of Digital Villages in Zhejiang Province. Computational Intelligence and Neuroscience, 2022, 9928030. https://doi.org/10.1155/2022/9928030
Zhang, S., Li, F., & Xiao, J. J. (2020). Internet penetration and consumption inequality in China. International Journal of Consumer Studies, 44(5), 407–422. https://doi.org/10.1111/ijcs.12575
Zhao, C., Wu, Y., & Guo, J. (2022). Mobile payment and Chinese rural household consumption. China Economic Review, 71, 101719. https://doi.org/10.1016/j.chieco.2021.101719
Zhao, T., Zhang, Z., & Liang, S. (2020). Digital economy, entrepreneurship, and high-quality economic development: Empirical evidence from urban China. Journal of Management World, 36(10), 65–76. https://doi.org/10.19744/j.cnki.11-1235/f.2020.0154
Zhou, R. (2022). Sustainable economic development, digital payment, and consumer demand: Evidence from China. International Journal of Environmental Research and Public Health, 19(14), 8819. https://doi.org/10.3390/ijerph19148819