The Impact of Financial Literacy on Household Consumption

Abstract

In this paper, the relationship between financial literacy and household consumption is empirically analyzed by using The Chinese Family Micro Database (CHFS), and the consumption structure of Chinese households is subdivided into survival consumption, development consumption and enjoyment consumption, respectively, to study the impact of financial literacy on different consumption structures. The mediating effect of credit constraint factors is studied and the moderating effect of digital finance is explored. The results show that: financial literacy has a significant impact on household consumption behavior, and financial literacy has a significant positive impact on different structures of household consumption behavior. Credit constraint plays an obvious mediating role between financial literacy and household consumption. Digital finance has a direct mediating effect between financial literacy and credit constraint and between credit constraint and household consumption, and has a significant moderating effect on them. Therefore, it provides reference opinions for promoting consumption from the perspectives of improving the financial literacy of residents and increasing the development of digital finance.