The impact of the Internet on household consumption expenditure: an empirical study based on China Family Panel Studies data

Abstract

This article empirically analyzes the impact of Internet usage on household consumption expenditure based on the China Family Panel Studies (CFPS) data for three periods 2014, 2016, and 2018. The results show that Internet use significantly increases household consumption. This boost persists after adding a series of control variables, accounting for differences in time and region, or changing the measurement of the main explanatory variables. After introducing instrumental variables to overcome potential endogeneity problems and further including the Internet use of the financial decision maker’s spouse for a series of robustness tests, the findings remain robust. The positive boost is even more significant. Finally, heterogeneity analysis is conducted for different consumption types, urban and rural areas, gender of financial decision-makers, and use of other Internet tools.