An empirical study on the impact of household debt level on consumption behavior: Based on the mechanism of the housing provident fund system and risk preference

• The housing provident fund system boosts household consumption. • High household debt levels negatively affect consumption. • Risk appetite influences the link between debt and consumption. Based on 2015, 2017, and 2019 China Household Finance Survey (CHFS) data, this paper analyzes the relationship between the housing provident fund system, household debt, and consumer behavior. The empirical analysis reveals that the housing provident fund system has a significant positive incentive effect on household consumption, while household debt has become an obstacle to consumption growth. At the same time, risk preference plays an important mediating role between debt and consumption. It is noteworthy that there are significant differences in the impact of household debt on consumption patterns between urban and rural residents.