---
title: "Digital financial literacy and household consumption in China: spending levels, pathways, and stru"
id: "plos-one-6-digital-financial-literacy-and-household-consumption-total-expenditure-versus"
canonical_url: "https://medichelpline.com/clinical-feed/plos-one-6-digital-financial-literacy-and-household-consumption-total-expenditure-versus"
content_type: "clinical_feed_article"
specialty: "General"
source_name: "PLOS ONE (Medicine)"
source_url: "https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484"
published_at: "2026-09-01T14:00:00.000Z"
evidence_level: "Journal Feed"
license: "CC-BY-NC-4.0 / Informational Use"
---
# Digital financial literacy and household consumption in China: spending levels, pathways, and stru
## Provenance & Clinical Metadata
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- **Specialty:** [General](https://medichelpline.com/clinical-feed/general.md)
- **Primary Source:** PLOS ONE (Medicine)
- **Source URL:** [Original Journal Publication](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484)
- **Published At:** 2026-09-01T14:00:00.000Z
- **Evidence Rating:** Journal Feed
## Executive GIST (TL;DR)
- The study uses China Household Finance Survey (CHFS) data to examine associations between **digital financial literacy** (DFL) and household consumption, distinguishing total consumption expenditure and **consumption structure** (subsistence, developmental, enjoyment proportions). - Higher DFL is positively associated with greater **total consumption expenditure**, with the association strongest among low-income households. - **Borrowing** (digital credit) is identified as the principal pathway linking DFL to higher consumption; investment and insurance channels have smaller roles. - Evidence for systematic changes in the full consumption structure is weak: while DFL is associated with a lower subsistence share and a higher enjoyment share, the overall structural shift is not robust. - Theoretical channels considered include relaxing liquidity constraints via digital credit, generating property income via investment, and lowering precautionary savings via insurance; these inform the empirical tests. - The authors argue that DFL programmes can be an effective demand-side tool to boost household consumption, particularly among disadvantaged groups, but structural upgrading of consumption likely requires complementary policies in education, health, and culture. - Policy implications emphasize facilitating responsible access to digital credit and strengthening trust in digital insurance products to support the DFL–consumption link. - Data are publicly available from CHFS; the authors report no competing interests and acknowledge funding from a National Social Science Fund of China project. - The paper contributes by separating total expenditure from consumption composition in DFL research, documenting heterogeneous effects by income, and highlighting borrowing as the dominant transmission mechanism.
## Clinical Analysis & Structured Key Points
[ Skip to main content ](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#main-content) Advertisement * [plos.org](https://plos.org/) * [Create account](https://community.plos.org/registration/new) * [Sign in](https://journals.plos.org/user/secure/login?page=%2Fplosone%2Farticle%3Fid%3D10.1371%2Fjournal.pone.0357484) * * About * Browse * Publish * [](https://journals.plos.org/plosone/ "PLOS One") * Search [advanced search](https://journals.plos.org/plosone/search) * [Browse Topics](https://journals.plos.org/plosone/subjectAreaBrowse) Browse Subject Areas ? Click through the PLOS taxonomy to find articles in your field. For more information about PLOS Subject Areas, click [here](https://github.com/PLOS/plos-thesaurus/blob/master/README.md "Link opens in new window"). [](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484) [](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484) * 0 [Save](https://journals.plos.org/plosone/article/metrics?id=10.1371/journal.pone.0357484#savedHeader) [Total Mendeley and Citeulike bookmarks.](https://journals.plos.org/plosone/article/metrics?id=10.1371/journal.pone.0357484#savedHeader) * 0 [Citation](https://journals.plos.org/plosone/article/metrics?id=10.1371/journal.pone.0357484#citedHeader) [Paper's citation count computed by Dimensions.](https://journals.plos.org/plosone/article/metrics?id=10.1371/journal.pone.0357484#citedHeader) * 28 [View](https://journals.plos.org/plosone/article/metrics?id=10.1371/journal.pone.0357484#viewedHeader) [PLOS views and downloads.](https://journals.plos.org/plosone/article/metrics?id=10.1371/journal.pone.0357484#viewedHeader) * 0 [Share](https://journals.plos.org/plosone/article/metrics?id=10.1371/journal.pone.0357484#discussedHeader) [Sum of Facebook, Twitter, Reddit and Wikipedia activity.](https://journals.plos.org/plosone/article/metrics?id=10.1371/journal.pone.0357484#discussedHeader) Open Access Peer-reviewed Research Article # Digital financial literacy and household consumption: Total expenditure versus consumption structure in China * Yan Shen , Roles Funding acquisition, Methodology, Project administration, Writing – original draft * E-mail: 183677335@qq.com Affiliation School of Economics and Management, Xi’an University of Technology, Xi’an, China [ ![ORCID logo](https://journals.plos.org/resource/img/orcid_16x16.png) https://orcid.org/0000-0002-9495-4803 ](https://orcid.org/0000-0002-9495-4803 "ORCID Registry") ⨯ * Wenxiu Hu, Roles Project administration, Validation Affiliation School of Economics and Management, Xi’an University of Technology, Xi’an, China ⨯ * Xin Wang Roles Investigation, Validation, Writing – original draft Affiliation School of Economics and Management, Xi’an University of Technology, Xi’an, China ⨯ # Digital financial literacy and household consumption: Total expenditure versus consumption structure in China * Yan Shen, * Wenxiu Hu, * Xin Wang ![PLOS](https://journals.plos.org/resource/img/logo-plos-full-color.svg) x * Published: September 1, 2026 * * [Article](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484) * [Authors](https://journals.plos.org/plosone/article/authors?id=10.1371/journal.pone.0357484) * [Metrics](https://journals.plos.org/plosone/article/metrics?id=10.1371/journal.pone.0357484) * [Comments](https://journals.plos.org/plosone/article/comments?id=10.1371/journal.pone.0357484) * [Media Coverage](http://plos.altmetric.com/details/doi/10.1371/journal.pone.0357484) * [Abstract](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#abstract0) * [1. Introduction](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#sec001) * [2. Theoretical analysis and research hypotheses](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#sec002) * [3. Data and Methodology](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#sec005) * [4. Empirical results](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#sec014) * [5. Discussion and conclusion](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#sec024) * [6. Limitations and future directions](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#sec027) * [Supporting information](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#sec028) * [References](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#references) * [Reader Comments](https://journals.plos.org/plosone/article/comments?id=10.1371/journal.pone.0357484) * [Figures](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484) ## Abstract Using data from the China Household Finance Survey, this study examines how digital financial literacy relates to household consumption. Digital financial literacy is positively associated with total consumption expenditure, especially among low-income households. Borrowing is the main pathway linking digital financial literacy to consumption, while investment and insurance play smaller roles. In contrast, the evidence for a systematic shift in the full consumption structure is not robust. The study suggests that digital financial literacy programmes can serve as an effective demand-side tool for household consumption, especially for low-income groups, but achieving structural changes in consumption likely requires complementary policies in education, health, and culture. Facilitating responsible digital credit access and building trust in digital insurance products are important for the link between digital financial literacy and higher household consumption. ## Figures ![Table 6](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t006) ![Table 7](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t007) ![Table 8](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t008) ![Fig 1](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.g001) ![Table 1](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t001) ![Table 2](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t002) ![Table 3](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t003) ![Table 4](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t004) ![Table 5](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t005) ![Table 6](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t006) ![Table 7](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t007) ![Table 8](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t008) ![Fig 1](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.g001) ![Table 1](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t001) ![Table 2](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.t002) **Citation:** Shen Y, Hu W, Wang X (2026) Digital financial literacy and household consumption: Total expenditure versus consumption structure in China. PLoS One 21(9): e0357484. https://doi.org/10.1371/journal.pone.0357484 **Editor:** Ricky Chee Jiun Chia, Universiti Malaysia Sabah, MALAYSIA **Received:** July 13, 2025; **Accepted:** August 18, 2026; **Published:** September 1, 2026 **Copyright:** © 2026 Shen et al. This is an open access article distributed under the terms of the [Creative Commons Attribution License](http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. **Data Availability:** Data are available from the China Household Finance Survey (CHFS) at Southwestern University of Finance and Economics. Researchers can apply for access at the . The authors do not have special access privileges. All data used in this study are publicly available upon application. **Funding:** This work was supported by the General Project of the National Social Science Fund of China (Grant No. 25BJY197). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript. **Competing interests:** The authors have declared that no competing interests exist. **Abbreviations:** AME, Average marginal effect; CE, Total consumption expenditure; ECP, Enjoyment consumption proportion; DCP, Developmental consumption proportion; DFL, Digital financial literacy; SCP, Subsistence consumption proportion ## 1. Introduction Rooted in the Permanent Income Hypothesis, consumption decisions are related to individuals’ long-term income expectations, which encompass both labor income and property income. However, as labor’s share of GDP has declined by 0.6 percentage points over the past decade, according to the _World Employment and Social Outlook: May 2025 Update_ [[1](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref001)], and wage growth has stagnated, the potential role of property income in household consumption has received insufficient scholarly attention. This study investigates whether digital financial literacy (DFL) is associated with total consumption expenditure (CE) and consumption structure. The potential channel is financial behaviors that are related to property income. Thus, DFL provides a pathway beyond wage-driven growth. Financial behaviors, such as borrowing, investment, and insurance, are associated with household consumption through various channels. For instance, borrowing alleviates short-term liquidity constraints [[2](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref002),[3](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref003)], investment generates property income [[4](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref004),[5](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref005)], and insurance reduces precautionary savings [[6](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref006)]. These pathways have been well documented in the literature. However, in the digital economy, effectively engaging in these behaviors often requires adequate DFL. Thus, understanding how DFL relates to these behaviors is key to explaining its association with household consumption. Financial literacy is significantly related to greater participation in formal financial markets [[7](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref007)]. Traditional financial literacy metrics fail to address the complexities facing consumers in digital financial environments. It is essential to integrate digital and financial literacy [[8](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref008)]. The Alliance for Financial Inclusion (AFI) defines digital financial literacy as acquiring knowledge, skills, confidence, and competencies to safely use digitally delivered financial products and services, to make informed financial decisions [[9](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref009)]. Higher DFL levels are significantly associated with residents’ engagement in financial activities for economic benefit [[10](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref010)–[12](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref012)]. High DFL is associated with more rational decision-making in financial investment, while low DFL is correlated with herd investing [[13](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref013)]. Given that digital finance is associated with consumption, the current study aims to explore potential pathways through which DFL may be related to consumption by integrating digital financial literacy, financial behavior, and consumption into a unified analytical framework. While studies have predominantly focused on the absolute level of consumption, this research characterizes consumption behavior from two complementary dimensions: total consumption expenditure and consumption structure. The former pertains to “how much is consumed” and represents a direct indicator of consumption capacity. The latter refers to the proportional allocation of expenditures across different consumption types, reflecting the internal composition and hierarchy of consumer needs; thus, consumption structure addresses the question of “what is consumed.” Some existing studies have examined the relationship between digital finance (or financial literacy) and consumption structure, finding positive relationships and identifying various transmission pathways [[14](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref014)–[16](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref016)]. However, they rarely take DFL as the core concept, nor do they rigorously distinguish between the links with total expenditure versus consumption structure. Moreover, most studies treat the population as homogeneous, neglecting heterogeneity across demographic groups. To fill these gaps, this study empirically examines the associations, pathways, and heterogeneities of DFL with household consumption using Chinese survey data. This study makes four contributions. First, our results show a robust positive association between DFL and total consumption expenditure, but no robust evidence that DFL is associated with changes in consumption structure (i.e., the shares of subsistence, developmental, and enjoyment spending). This finding challenges the widely held view that digital finance automatically promotes consumption upgrading. Second, borrowing is the main pathway between DFL and consumption, while investment and insurance play smaller roles, consistent with a liquidity-constraint interpretation. Third, we document heterogeneous associations: the DFL–CE link is strongest for low-income households, while urban-rural differences are only marginally significant, and regional or educational differences are not significant. These patterns offer preliminary insights for targeted policy interventions. Thus, targeted DFL programs for disadvantaged groups may yield the highest returns. Fourth, this study is the first to distinguish total consumption expenditure from consumption structure in the DFL literature. It reveals that DFL is associated with a lower subsistence consumption proportion and a higher enjoyment consumption proportion, yet the evidence for a systematic shift in the full consumption structure is not robust. ## 2. Theoretical analysis and research hypotheses ### 2.1. Conceptual framework We identify three potential channels through which DFL may be associated with household consumption. Borrowing (liquidity constraints). Digital credit lowers transaction costs and reduces information frictions [[17](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref017)]. DFL is associated with better evaluation of credit terms and may help individuals avoid unfavorable lending conditions [[18](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref018)]. Relaxing liquidity constraints [[2](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref002)] is in turn associated with higher current consumption, especially for basic needs. Investment (property income). DFL is associated with greater participation in risky asset markets [[19](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref019)], which may generate property income. Mental accounting suggests that such gains are often allocated to enjoyment consumption, such as travel or leisure [[20](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref020)]. Insurance (precautionary savings). DFL is associated with improved risk perception and insurance literacy [[21](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref021)]. This may allow households to reduce costly precautionary savings and replace them with lower-premium insurance [[22](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref022)], potentially freeing up income for current consumption. Taken together, these channels suggest that DFL may be associated with household consumption outcomes, namely CE and the composition of spending across subsistence, developmental, and enjoyment categories. [Fig 1](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone-0357484-g001) summarizes the framework. [![thumbnail](https://journals.plos.org/plosone/article/figure/image?size=inline&id=10.1371/journal.pone.0357484.g001)](https://journals.plos.org/plosone/article/figure/image?size=medium&id=10.1371/journal.pone.0357484.g001 "Click for larger image") Download: * [PNG larger image](https://journals.plos.org/plosone/article/figure/image?download&size=large&id=10.1371/journal.pone.0357484.g001) * [TIFF original image](https://journals.plos.org/plosone/article/figure/image?download&size=original&id=10.1371/journal.pone.0357484.g001) Fig 1. Conceptual framework of DFL’s association with household consumption. [ https://doi.org/10.1371/journal.pone.0357484.g001](https://doi.org/10.1371/journal.pone.0357484.g001) ### 2.2. Hypotheses development Previous research using CHFS data shows that consumers’ digital financial capability is positively associated with total household consumption and online consumption [[23](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref023)]. The use of digital finance is associated with consumption upgrading and adjustments in household financial asset allocation, including participation in risk markets and greater portfolio diversity [[16](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref016)]. Higher DFL is related to consumers’ capacity to accurately assess the risk-return characteristics of credit instruments and wealth management products [[24](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref024)]. This allows them to allocate financial resources more efficiently while safeguarding capital security. This process releases consumption demand that had been suppressed by liquidity constraints. DFL is positively associated with current saving and spending behavior. It is also related to future savings and spending foresight [[25](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref025)]. Based on this evidence, we propose the following hypothesis: When a country reaches the “stage of maturity,” consumption patterns are observed to shift toward durable goods and services [[26](https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0357484#pone.0357484.ref026)]. Goods can be class
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