Impact of mobile payment adoption on household expenditures and subjective well-being : A thesis submitted in partial fulfilment of the requirements for the Degree of Master of Commerce and Management at Lincoln University

Abstract

In recent years, mobile payment has gradually become increasingly popular worldwide. Especially in China, mobile payments are ubiquitous and gradually replacing traditional cash payments. This thesis estimates the effects of mobile payment adoption on household expenditures and subjective well-being. It considersfour categories of household expenditures (clothes, durable goods, consumer goods, and cultural and leisure activities) and four indicators (life satisfaction, contentment, income satisfaction, and depression) of subjective well-being. This thesis uses the Augmented Inverse Probability Weighting estimator to analyse the 2017 Chinese General Social Survey data while accounting for the selection bias inherent in mobile payment adoption. The empirical results show that people’s decisions to adopt mobile payments are positively associated with their educational level, car ownership, social interaction, Internet penetration rate, and residential location. Mobile payment adoption significantly increases household expenditures on consumer goods and cultural and leisure activities but not on clothes and durable goods. Moreover, mobile payment adoption significantly decreases contentment while increasing depression. This thesis also finds that mobile payment adoption significantly decreases urban people’s contentment but significantly increases urban people’s depression. Disaggregated analyses show that mobile payment adoption increases spending on consumer goods but decreases contentment for urban households; increases spending on consumer goods and depression for rural households; increases spending on consumer goods; decreases contentment and income satisfaction for male respondents; and increases spending on clothing, cultural, and leisure activities, and depression for female respondents. Therefore, the government should create products and services to extend the benefits of mobile payments to all segments of Chinese society. At the same time, it should help consumers avoid the debt incurredthrough educational programs and advertising.