Impact of mobile payment adoption on household expenditures and subjective well‐being

• Published date: 01 February 2024
• Author: Quan He,Wanglin Ma,Puneet Vatsa,Hongyun Zheng
• Date: 01 February 2024
• DOI: http://doi.org/10.1111/rode.13054

REGULAR ARTICLE

Impact of mobile payment adoption on

household expenditures and subjective

well-being

Quan He

1

|Wanglin Ma

1

|Puneet Vatsa

1

|

Hongyun Zheng

2

1

Department of Global Value Chains and

Trade, Faculty of Agribusiness and

Commerce, Lincoln University,

Christchurch, New Zealand

2

College of Economics & Management,

Huazhong Agricultural University,

Wuhan, China

Correspondence

Wanglin Ma, Department of Global Value

Chains and Trade, Faculty of

Agribusiness and Commerce, Lincoln

University, Christchurch, New Zealand.

Email: wanglin.ma@lincoln.ac.nz

Funding information

National Natural Science Foundation of

China, Grant/Award Number: 72303076

Abstract

This paper estimates the effects of mobile payment

adoption on household expenditures and people's

subjective well-being. We consider four categories of

household expenditures (that on clothes, durable

goods, consumer goods, and cultural and leisure

activities) and four indicators (life satisfaction, con-

tentment, income satisfaction, and depression) of

subjective well-being. We use the Augmented Inverse

Probability Weighting estimator to analyze 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 payment are positively

associated with their educational levels, car owner-

ship, 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 expenditures on clothes and durable

goods. Moreover, mobile payment adoption signifi-

cantly decreases people's contentment while increas-

ing depression. We also find that mobile payment

adoption significantly decreases the contentment of

Received: 24 August 2023Revised: 1 September 2023Accepted: 12 September 2023

DOI: 10.1111/rode.13054

This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distrib ution and

reproduction in any medium, provided the original work is properly cited.

© 2023 The Authors. Review of Development Economics published by John Wiley & Sons Ltd.

264 Rev Dev Econ. 2024;28:264–285.

wileyonlinelibrary.com/journal/rode

urban people but significantly increases the depres-

sion of rural people.

KEYWORDS

AIPW estimator, household expenditures, mobile payment

adoption, subjective well-being

JEL CLASSIFICATION

J33, P23, I31

1|INTRODUCTION

Mobile payments—transfers of funds between entities using mobile devices—have become

exceedingly popular globally. Propelled by mass mobile phone adoption and growing internet

penetration, mobile payments are rapidly transforming the world into a largely cashless society;

they have become part and parcel of the day-to-day lives of consumers (Al-Qudah et al., 2022;

Dash et al., 2023; Mukhopadhyay & Upadhyay, 2022;Songetal.,2023;Yangetal.,2023;Zheng&

Ma, 2022). Obviating the needto carry cash and be present in person to complete transactions

and helping customers save time and energy, mobile payments contribute to a seamless, secure,

and convenient shopping experience (Agarwal & Chua, 2020; Dahlberg et al., 2008;Da¸stan

et al., 2016; Varshney&Vetter, 2002; Zhang & Mao, 2020). For these reasons,people using mobile

payments are likely to spend more on goods and services than those who do not. In fact, they

may overspend, accumulate debt, and consequently experience mental distress.

Many studies have investigated the effects of mobile payment adoption on household expen-

ditures (Agarwal & Chua, 2020; Li et al., 2020; Liu et al., 2020; Song et al., 2020; Wu et al., 2022;

Zhang et al., 2022). For example, Liu et al. (2020) found that mobile payments boosted urban

households' consumption during the COVID-19 pandemic; however, there was no association

between mobile payment adoption and rural household consumption. In contrast, Zhang et al.

(2022) showed that mobile payments fostered financial inclusion and increased rural house-

holds' consumption. Zhao, Wu, and Guo (2022) concluded that mobile payments increased

household consumption among the elderly and that the economically disadvantaged and those

with low levels of education can benefit more because mobile payment adoption lowers transac-

tion costs, alleviates liquidity constraints, and reduces the loss of psychological expectations.

A parallel strand of literature consists of studies analyzing the association between mobile

payment adoption and individuals' subjective well-being (Lu & Kandilov, 2021; Nie et al., 2021;

Rahman et al., 2019; Wu et al., 2022; Zheng & Ma, 2021). Subjective well-being refers to how

one experiences and evaluates life, its various domains, and specific activities that one engages

in (National Academy of Sciences, 2013). Subjective well-being can be measured along several

dimensions: life satisfaction, domain satisfaction, happiness, contentment, and the incidence of

mental ailments such as depression (Guillen-Royo, 2019; Zheng & Ma, 2021). These dimen-

sions, although related, reveal different aspects of subjective well-being and quality of life. For

example, life satisfaction is eudaimonic, pertaining to finding purpose and meaning in life;

domain satisfaction derives from one's employment, expertise in recreational activities such as

playing sports and singing, and social engagement; happiness is hedonic and stems from

experiencing pleasure and enjoyment in day-to-day life.

HE ET AL.265