The impact of digital literacy on consumption inequality

In the context of accelerating digital transformation and the imperative to expand domestic demand, this study examines how digital literacy influences household consumption inequality. Using nationally representative panel data from the China Family Panel Studies (CFPS) from 2014 to 2022, the authors construct a multidimensional digital literacy index. The empirical results show that digital literacy significantly reduces consumption inequality. Mechanism analysis reveals that this effect operates through reducing income inequality, improving employment quality, and lowering barriers to online consumption. Heterogeneity analysis indicates that the effect is more pronounced among households without computer use at work and those with longer internet usage duration. Further results show stronger equalizing effects for low- and middle-consumption groups and for developmental and hedonic consumption. The findings highlight digital literacy's role in promoting inclusive consumption and reducing inequality in the digital economy.

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