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Does digital finance alleviate household consumption inequality? Evidence from China

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  • Chen, Zhe
  • Li, Xiaojing
  • Zhang, Jizhou
  • Xia, Xianli

Abstract

The advent of digital finance has mitigated financial constraints for residents in rural areas, offering a new avenue to reduce consumption inequality. This paper examines the relationship between the use of digital finance and consumption inequality based on data from the China Household Finance Survey. The results reveal that digital finance has a negative effect on consumption inequality, with a more significant impact on reducing developmental consumption inequality for families. The estimations of testing the potential mechanisms indicate that digital finance mitigates income disparities and heightens risk preferences, thereby reducing consumption inequality among rural residents.

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  • Chen, Zhe & Li, Xiaojing & Zhang, Jizhou & Xia, Xianli, 2024. "Does digital finance alleviate household consumption inequality? Evidence from China," Finance Research Letters, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:finlet:v:60:y:2024:i:c:s1544612323012163
    DOI: 10.1016/j.frl.2023.104844
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    Cited by:

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    3. Wang, Yizi & Li, Lanyi, 2024. "Digital economy, industrial structure upgrading, and residents' consumption: Empirical evidence from prefecture-level cities in China," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 1045-1058.
    4. Peng, Jia-Hui & Wang, Ke-Liang & Cheng, Yun-He & Miao, Zhuang, 2024. "How does digital inclusive finance affect energy justice? Evidence from China," Finance Research Letters, Elsevier, vol. 67(PA).
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    6. Jiang, Haohan & Zhao, Fang, 2025. "Impact of digital finance on the high-quality development with Chinese cultural industry," Finance Research Letters, Elsevier, vol. 80(C).
    7. Hu, Siyang & Liu, Dongyang, 2025. "Digital economy, financial literacy, and financial risk-taking in rural households," International Review of Economics & Finance, Elsevier, vol. 98(C).
    8. Wang, Haijing & Meng, Chao, 2025. "Digital finance and rural household consumption," Finance Research Letters, Elsevier, vol. 86(PG).
    9. Zhang, Xianjun & Lu, Xiaomeng & Korkmaz, Aslihan Gizem & Li, Youwei & Yue, Pengpeng, 2025. "Digital financial inclusion and household energy efficiency," Finance Research Letters, Elsevier, vol. 86(PG).
    10. Lu, Xiaomeng & He, Zehui & Li, Yaling & Luo, Ronghua, 2025. "Post-compulsory education of children and household asset allocation," Pacific-Basin Finance Journal, Elsevier, vol. 89(C).
    11. Zhang, Jinhua & Chen, Shuangyu & Goodell, John W. & Du, Anna Min, 2025. "Digital credit and insurance: Improving economic well-being for rural households," International Review of Economics & Finance, Elsevier, vol. 98(C).
    12. Feng, Yanchao & Yan, Tong & Hu, Shilei & Zhang, Zhenhua, 2025. "The impact of digital inclusive finance on household carbon emissions: Empirical evidence from China," International Review of Financial Analysis, Elsevier, vol. 102(C).
    13. Xiong, Wei & Jiang, Mengzhen & Liu, Yingying, 2024. "Digital economy, risk attitudes, and entrepreneurial decision-making in urban and rural households in China," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    14. Chen Luo & Wenwen Yu & Lindong Li & Aizhi Li & Jinbo Du, 2026. "How does digital finance affect electricity consumption? an empirical analysis of the Yangtze River Economic Belt of China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 28(3), pages 6677-6694, March.
    15. Zhu, Cuihua & Yu, Jingyuan, 2025. "Going out and bringing in: Impact of digital finance on firms' cross-regional investments," International Review of Financial Analysis, Elsevier, vol. 106(C).
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    17. Tu, Ruide & Zeng, Yitang & Zhang, Su & Zhou, Yifu, 2025. "Dawn in enterprises' financial difficulties: The significance of digital financial awareness in mitigating hardship," International Review of Economics & Finance, Elsevier, vol. 103(C).
    18. Prashasti Keshari & Awadhesh Kumar Tiwari, 2026. "Financial inclusion in rural region—a review and research agenda," Future Business Journal, Springer, vol. 12(1), pages 1-25, December.

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