Research On The Influence Of Digital Inclusive Finance On Rural Household Consumption Inequality

In recent years,China’s foreign trade has suffered greatly from the impact of trade wars and the COVID-19.Under a double-cycle development pattern,consumption will become an important thrust for economic growth.With an average of around 40% of the country’s population in rural areas over the past 10 years,rural residents have huge consumption potential.However,along with consumption upgrading,the issue of consumption inequality has also become increasingly prominent,with data showing that there is still a large consumption gap within the rural population.Consumption inequality is a reflection of the disparity in the welfare of the population and has a negative effect on the release of consumer demand and social stability.The development of digital inclusive finance can provide a new way of thinking and an effective path to promote consumption equity by widening access to financial services for the disadvantaged and enabling all rural residents to share the fruits of financial development,thereby alleviating consumption inequality and achieving the goals of economic growth and common prosperity.Based on the Digital Inclusive Finance Index released by Peking University and data from the three editions of the China Household Finance Survey in 2015,2017 and 2019,this paper explores the impact of digital inclusive finance development on consumption inequality among rural residents in China from the perspective of micro households,and conducts a heterogeneous study with respect to income levels,regional economic development status and educational attainment of household heads.In terms of impact mechanisms,this paper analyses the ways in which digital finance affects rural residents’ consumption inequality from three perspectives: the facilitation of payment methods,the reduction of precautionary savings and the alleviation of liquidity constraints.Finally,the paper further analyses the impact of residents’ own digital financial use diversification on their consumption.The empirical results show that:(1)The development of digital inclusive finance can alleviate consumption inequality among rural residents,and has a reducing effect on all three types of consumption inequality:subsistence,enjoyment and development;(2)The mechanism analysis shows that digital inclusive finance can affect consumption inequality among rural residents through optimising the payment environment,reducing precautionary savings and alleviating liquidity constraints;(3)Income heterogeneity shows that the development of digital inclusive finance only affects the consumption inequality of low-income residents.Regional heterogeneity shows that at this stage,digital inclusive finance development has a stronger impact on consumption inequality for rural residents in higher economic areas with better infrastructure;Heterogeneity in the education level of household heads shows that digital inclusive finance has no significant impact on consumption inequality for rural residents with both low and high education levels;(4)From the perspective of rural residents’ own digital financial use,diversified digital financial use has a significant impact on the reduction of consumption inequality.The above findings provide a reference for how to tap the consumption potential of rural low-consumption groups and reduce consumption disparity through the development of digital inclusive finance.The main innovation of this paper is to explore the relationship between digital inclusive finance and consumption inequality among rural residents by measuring at the individual level,filling a gap in existing research.At the same time,the sample selected is more current and the research perspective is more comprehensive.The paper concludes with four policy recommendations based on the research findings.