A Study On The Heterogeneity Of Consumption Patterns In Rural China From The Perspective Of Inclusive Digital Finance

Currently,the global economic situation presents an unprecedentedly complex pattern,which has further weakened China’s external demand.To maintain long-term stability and sustainable growth of the national economy and accelerate the formation of a new development pattern of "dual circulation" economy,it is necessary to expand domestic demand.The key to expanding domestic demand lies in continuously improving the scale and level of consumption.China’s rural residents constitute a significantly large consumer group.Therefore,it is crucial to address the issue of insufficient consumption in rural areas.Liquidity constraints and precautionary saving motivations are important drivers of insufficient consumption among rural residents.The rapid development of digital inclusive finance provides diversified financial services for rural residents and facilitates financial institutions to quickly collect customer credit data,thereby effectively alleviating the liquidity constraints of rural residents.It also promotes the transformation and upgrading of traditional insurance business models,breaks through geographical restrictions,reduces operating costs,and improves insurance accessibility and rural residents’ participation rate,effectively enhancing their ability to cope with uncertainty.This paper aims to discuss the practical role of digital inclusive finance development on the liquidity constraints and preventive motivation of rural residents.It will make an in-depth analysis of the role of liquidity constraints and the impact of preventive savings on rural household consumption under the influence of digital inclusive finance,as well as their dynamic evolution process.The findings could provide a realistic basis for fully exploring the potential of rural consumption and help to form a new development pattern.Firstly,relevant literature was reviewed,including the development of classical consumption theory,the research on rural consumption deficits,the current state of research on digital inclusive finance,the relationship between digital inclusive finance and consumption.Secondly,a theoretical model was constructed,which demonstrated the important causal relationship between liquidity constraints,preventive savings and rural consumption.Based on this,a finite mixture model was introduced to construct a model framework for empirical research on heterogeneous rural consumption patterns.Subsequently,a fixed effects model was used to empirically test the impact of liquidity constraints and preventive savings on rural household consumption,and to analyze the characteristics of their impact.Furthermore,subjective heterogeneity analysis was conducted based on the obvious economic development imbalance between different regions in China,to verify the differential impact of liquidity constraints and preventive savings on rural consumption.Then,a finite mixture model was introduced to analyze the different consumption pathways under objective classification of household characteristics.Furthermore,a finite mixture model incorporating digital inclusive finance as a covariate was introduced to analyze the causal relationships behind the features of various pathway impacts among the sample’s objective subgroups,and to explore the possible pathway transformations over time.Finally,robustness tests were performed using replacement variables and endogeneity tests in the empirical research.The study found that liquidity constraints and precautionary savings have significant inhibitory effects on rural residents’ consumption,with liquidity constraints having the greatest impact on rural residents’ consumption in the western region,while precautionary savings have a stronger impact on the central region.There are two distinct paths for the impact of liquidity constraints and precautionary savings on rural residents’ consumption.Digital financial inclusion can help alleviate the inhibitory effects of liquidity constraints and precautionary savings on rural residents’ consumption.The coverage and digitalization of firstlevel indicators,such as digital inclusive financial services,only alleviate the inhibitory effect of liquidity constraints on farmers’ consumption.However,the depth of use of digital inclusive finance is the key factor in reducing the impact of liquidity constraints and precautionary savings.During the observation period,the consumption path of farmers mainly shifted from the "severely inhibited" path to the "mildly inhibited" path,with the transition mainly occurring in 2018.This paper provides insights into promoting rural residents’ consumption and further developing the dual-cycle economy.