The impact of the second-level digital divide on residents’ consumption

The digital economy, which relies on the latest information technology revolution advancements, imposes high demands on the digital literacy of individual residents participating in it. This has led to the emergence of a digital divide, which not only widens the gap between the rich and the poor in society but also to a certain extent, inhibits the growth of consumption. Previous studies have failed to elucidate how the digital divide affects residents’ consumption. This paper explores the mechanism by which the digital divide affects residents’ consumption by conducting a special survey of 984 residents in 15 counties and districts in China, and then obtaining primary research data. The study results show that, first, the digital divide has a significant inhibitory effect on residents’ consumption, which remains valid after robustness and endogeneity tests. Further research confirms that the narrowing of the digital divide reduces the probability of residents’ consumption at lower levels and increases the likelihood of residents’ consumption at higher levels, further supporting the inhibitory effect of the digital divide on residents’ consumption. Second, the mechanism analysis shows that the digital divide inhibits residents’ consumption by restricting their access to digital credit. Third, the heterogeneity analysis indicates that the suppression of residents’ consumption by the digital divide varies between urban and rural areas, as well as between different age groups, particularly affecting the group over 50 years old. The findings provide insights for further promoting residents’ consumption and narrowing the digital divide.