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Digital credit scoring and household consumption: Evidence from Sesame Credit in China

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  • Li, Jie
  • Zhou, Wenwen
  • Li, Xiaohong
  • Wu, Yu

Abstract

This study investigates the welfare-enhancing effects of digital personal credit scoring systems, with a particular focus on household consumption. Utilizing the latest nationally representative microdata from the China Household Finance Survey (CHFS) for 2021 and 2023, our empirical analysis demonstrates that Sesame Credit – Ant Group's digital credit product - exerts a statistically significant positive effect on household consumption expenditure. This stimulative effect is particularly observed in developmental and hedonic consumption. Mechanism analysis reveal that this impact operates primarily through improved credit accessibility and the relief of liquidity constraints. Furthermore, our results suggest that vulnerable households benefit more from Sesame Credit.

Suggested Citation

  • Li, Jie & Zhou, Wenwen & Li, Xiaohong & Wu, Yu, 2025. "Digital credit scoring and household consumption: Evidence from Sesame Credit in China," Emerging Markets Review, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:ememar:v:69:y:2025:i:c:s1566014125001219
    DOI: 10.1016/j.ememar.2025.101372
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    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G29 - Financial Economics - - Financial Institutions and Services - - - Other

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