The impact of smart city pilot policies on household consumption in households with older adults: mechanisms, heterogeneity, and inequality

With the rapid advancement of Smart City development, its impact on per capita household consumption in households with older adults remains insufficiently understood. This study aims to examine the causal effects of Smart City pilot policies on household consumption and consumption structure among older households in China. This study uses panel data from the China Health and Retirement Longitudinal Study from 2011 to 2020. A difference-in-differences approach is employed to identify the causal impact of Smart City pilot policies on per capita household consumption. Mechanism analysis is conducted to explore potential pathways, and heterogeneity analysis is performed across age, education, and income groups. The findings show that Smart City policies significantly increase per capita household consumption in households with older adults. This effect is primarily driven by improvements in digital connectivity, healthcare accessibility, and financial inclusion. The positive impact is more pronounced among households with older, less educated, and low- to middle-income members, while no statistically significant effects are observed among younger, higher-educated, or higher-income groups. In terms of consumption structure, Smart City development significantly increases subsistence-oriented expenditure but has limited effects on development- and leisure-oriented consumption. Additionally, the results suggest that these policies contribute to reducing disparities in household consumption. Smart City development plays a significant role in promoting household consumption and reducing consumption inequality among older households. The findings provide micro-level evidence on the distributional effects of urban digital policies and offer important implications for designing inclusive and equitable Smart City strategies.