IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v57y2021i7p2079-2093.html
   My bibliography  Save this article

Digital Payments and Households’ Consumption: A Mental Accounting Interpretation

Author

Listed:
  • Liming Hou
  • Shao-Chieh Hsueh
  • Shuoxun Zhang

Abstract

We explain the stimulating effect of digital payments on households’ consumption using mental accounting theory. With the China Household Finance Survey (CHFS) data in 2017, we empirically identify that households who use digital payments spend 20.63% more than those with alternative payment methods. From the mental accounting perspective, we argue that using digital payments increase consumers’ transaction utility, facilitate intentional adjustment of mental accounts, and result in more unplanned consumption. The stimulating effect is more substantial on long-term consumption and among households with low self-control abilities. Moreover, the integrated financial services provide access to liquidity and help smooth consumption.

Suggested Citation

  • Liming Hou & Shao-Chieh Hsueh & Shuoxun Zhang, 2021. "Digital Payments and Households’ Consumption: A Mental Accounting Interpretation," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 57(7), pages 2079-2093, May.
    • Handle: RePEc:mes:emfitr:v:57:y:2021:i:7:p:2079-2093
    DOI: 10.1080/1540496X.2021.1887727
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1540496X.2021.1887727
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1540496X.2021.1887727?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jie Li & Quanyun Song & Yu Wu & Bihong Huang, 2021. "The effects of online consumer credit on household consumption level and structure: Evidence from China," Journal of Consumer Affairs, Wiley Blackwell, vol. 55(4), pages 1614-1632, December.
    2. Li, Jiayi & Luo, Sumei & Zhou, Guangyou, 2023. "Electronic payment, natural environment and household consumption: Evidence from China household finance survey," International Review of Financial Analysis, Elsevier, vol. 85(C).
    3. He, Yuan & Li, Ke & Wang, Yipan, 2022. "Crossing the digital divide: The impact of the digital economy on elderly individuals’ consumption upgrade in China," Technology in Society, Elsevier, vol. 71(C).
    4. Zhou, Xianbo & Sun, Yucheng & Tao, Ying, 2023. "Does Digital Finance Upgrade Trickle-down consumption effect in China?," Economic Modelling, Elsevier, vol. 118(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:57:y:2021:i:7:p:2079-2093. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.