Impact of mobile payment adoption on household expenditures and subjective well-being

Abstract

This paper estimates the effects of mobile payment adoption on household expenditures and people's subjective well-being. We consider four categories of household expenditures (that on clothes, durable goods, consumer goods, and cultural and leisure activities) and four indicators (life satisfaction, contentment, income satisfaction, and depression) of subjective well-being. We use the Augmented Inverse Probability Weighting estimator to analyze the 2017 Chinese General Social Survey data while accounting for the selection bias inherent in mobile payment adoption. The empirical results show that people's decisions to adopt mobile payment are positively associated with their educational levels, car ownership, social interaction, internet penetration rate, and residential location. Mobile payment adoption significantly increases household expenditures on consumer goods and cultural and leisure activities but not on expenditures on clothes and durable goods. Moreover, mobile payment adoption significantly decreases people's contentment while increasing depression. We also find that mobile payment adoption significantly decreases the contentment of urban people but significantly increases the depression of rural people.