| As the world’s most populous country,China’s economy was once driven by investment and exports.Yet as China’s economy has become more and more developed,consumption in tern,has become part of the essential economic behavior of people’s daily lives,and household consumption has become a major factor of China’s economic development.The swift expansion of the Internet has given a new consumption model to China’s economy with a transition to the Internet era.The Internet can help residents obtain consumption information faster and at lower cost through various information channels,thus stimulating household consumption.Therefore,the development of the Internet acts as a crucial role for both the residents as well as for the economic development of China.The data sources for this paper are mainly from the 2018 China Family Panel Studies(CFPS).This paper uses different types of cross-sectional regression models as well as analysis,in terms of theoretical mechanisms,to discuss in depth the impact of Internet usage on household consumption.The primary results and findings of this paper are as followings: First,cross-sectional regressions’ empirical findings show that Internet use considerably raises household consumption.After adding individual-level and household-level control variables,Internet usage continues to have a positive and significant effect on household consumption.Secondly,the innovative idea of this paper is the inclusion of three types of mediating variables in the empirical analysis: ancillary income;information channels;and online shopping.After conducting mediating effect models,the results suggest that the increase of household consumption by Internet usage is caused by raising ancillary income,reducing information asymmetry between producers and consumers,and widening online shopping channels of information.By conducting a moderating effect model,this paper also finds that the financial inclusion index is related to online consumption,revealing that the higher the level of financial inclusion development,the greater the impact of Internet use on consumption by household.Finally,for heterogeneity analysis,samples from CFPS 2018 are divided into two areas: eastern region and non-eastern region.The results implies that Internet usage has a stronger impact on household consumption in the eastern region.Heterogeneity analysis was also conducted between urban and rural areas.Since Internet penetration rate in rural areas is not as widespread as in urban areas,the results show that Internet use has a relatively greater impact on urban household consumption.Furthermore,looking at differences in males and females,this paper finds that Internet usage has a more significant impact on female consumption,which agrees the same with our common sense.Lastly,this study uses two types of instrumental variables to conduct endogeneity analysis,both types have passed instrumental variable validations.The results show that after adding two types of instrumental variables,Internet use is still significant at the 1% level on household consumption. |
