Research on the Impact of Internet Use on Household Debt Level

The debt leverage ratio of China's household sector continues to rise, and the household leverage ratio has reached the top in the world. With the development of digital finance, the use of the Internet by households will aggravate the household debt level to a certain extent. This paper uses the sample data of the China Family Panel Studies (CFPS) from 2012 to 2018 to study whether the use of Internet increases the household debt level. The results are as following: First, the use of Internet has a significant impact on the rise of household debt level as a whole, especially the depth of Internet expenditure and the using channels have increased household debt level, but the frequency of using Internet has a certain mitigation effect on household debt level. Second, online lending and online payment play an intermediary role in the impact of using Internet on household debt level. Third, the heterogeneity test shows that the use of Internet has a significant impact on household debt level in households in Bohai rim, Yangtze River Delta Region, urban areas high asset and low education families, and has a stronger impact in high Internet penetration areas, high GDP areas and high-income families. Fourth, the robustness test results show the impact of Internet use on household debt level is still significant after 2 years. After using the instrumental variable method and the propensity score matching method to carry out the endogenous test, it shows that the conclusion of this paper is still robust. This study enriches the research on the mechanism of household debt, and provides a new perspective for reasonably reducing the level of household debt and preventing the risk spillover of household debt.