An Approach to Study the Poverty Reduction Effect of Digital Inclusive Finance from a Multidimensional Perspective Based on Clustering Algorithms

Abstract

The evaluation of clustering algorithms is intrinsically difficult because of the lack of objective measures. On the basis of the DIFI and China's Provincial Panel data, this study aims to test the poverty reduction effect of digital inclusive finance in three dimensions of income, education, and healthcare and further look at the transmission mechanism of digital inclusive finance in poverty alleviation. The results indicated that digital inclusive finance exerts a poverty reduction effect in three dimensions - medical poverty, income poverty, and education poverty. Of these, the coverage breadth significantly affects the alleviation of medical poverty, the use depth significantly affects the alleviation of income poverty and education poverty, and the digitization level affects the alleviation of poverty in three dimensions. The level of regional economic development plays an intermediary role in the poverty alleviation effect of digital inclusive finance. Compared with the western region, which is relatively backward in development, the poverty reduction effect of digital inclusive finance in the eastern region is more significant.