Research On The Influence And Mechanisms Of Using The Internet On Households’ Consumption

With the rapid popularization of the Internet and the continuous development of digital technology,the integration and innovation of digital economy and other industries have boosted the emergence of various new forms and modes of consumption,which has greatly broadened the consumption channels and choices of goods and services for households.Based on theoretical and empirical analysis,this paper systematically studies the influence and mechanisms of using the Internet on households’ consumption,which enriched the research achievements of using the Internet on households’ consumption,and provides evidence support for the importance of the Internet and digital economy in expanding consumers’ demand and narrowing consumption gap.Firstly,based on the review for the literatures,this paper summarizes the possible influence and mechanisms of using the Internet on households’ consumption,and constructs an overlapping generations(OLG)model,including using the Internet,the construction of Internet infrastructure and household consumption,and analyzes the influence of using the Internet on households’ consumption comprehensively.Theoretical results show that using the Internet could increase households’ consumption in the equilibrium.The reason is that the construction of Internet infrastructure leading by the government provides a convenient network environment for households to use the Internet,and the smooth of network channels provides households with more consumption choices,thus increasing the consumption expenditure of households.Secondly,based on the cleaning for the data from China Family Panel Studies(CFPS),this paper examines the influence of using the Internet on households’ consumption and the roles of different mechanisms in it.The empirical results indicate that,(1)using the Internet significantly raises households’ consumption,which reflects that if the heads of families use the internet,the growth of households’ consumption expenditure per capita,online consumption per capita and offline consumption per capita would increase 23.6 percent,116.8 percent and 22.5 percent respectively.(2)Using the Internet significantly improves the structure of households’ consumption,with the rapid growth of clothing expenditure,household appliance and commodities expenditure,cultural recreation and entertainment expenditure and medical care expenditure.(3)Using the Internet significantly promotes the upgrade of households’ consumption,and the proportion of developmental and hedonic consumption raises 1.9 percent.(4)The analysis of income mechanism shows that using the Internet could significantly increase households’ income by improving the search efficiency of individual employment and obtaining the support for entrepreneurship,which promotes the increase of households’ consumption.(5)The analysis of financing constraint mechanism observes that using the Internet would increase the propensity of borrowing from formal financial channels and alleviates financing constraint by enhancing financial accessibility,which stimulates the growth of household consumption.(6)The analysis of information channel mechanism confirms that using the Internet provides households with convenient and instant access to information acquisition and accelerate information exchange,which also promotes the rise of households’ consumption.(7)The analysis of risk attitude mechanism provides that using the Internet enhances households’ risk perception,raise households’ participation in commercial insurance,and reduces precautionary savings,meanwhile,using the Internet also changes households’ risk preference on making investment decisions,which stimulates the growth of households’ consumption.(8)The analysis of consumption concept mechanism reports that using the Internet increases households’ recognition of consumerism concept through social media and advertising,which raise households’ consumption.Under the background of promoting high-quality economic development and accelerating the establishment of a dual circulation development pattern,this paper suggests that,we should promote the new infrastructure construction,develop new forms of consumption vigorously,promote the indivisible integration of online and offline consumption,consummate the mechanism for promoting consumption,promote the development of digital inclusive finance,strengthen the protection of people’s livelihood,and continuously stimulate the vitality of consumption.