Abstract:

Social networks serve as a crucial lens for understanding consumer behavior and policy-making. This study examines the multifaceted impact and underlying mechanisms of dual networks on household consumption, drawing from the perspectives of formal and informal social networks and their characteristics, and utilizing micro–level household survey data from China. The research reveals that: (1) both formal and informal networks contribute to the adjustment of household consumption expenditures and structures, fostering an upgrading of consumption. Compared to the broad-based consumption enhancement provided by informal networks, the strength characteristics of formal networks primarily promote expenditures on development and luxury goods, thereby advancing consumption upgrades. (2) formal and informal networks can influence household consumption through economic income and credit channels. Both the breadth and intensity of formal networks, as well as the breadth of informal networks, enhance household consumption expenditures based on income levels. While informal network intensity crowds out household disposable income, its direct contribution to consumption is particularly evident. Formal and informal networks can facilitate consumer spending by alleviating constraints on borrowing. (3) digital technology modulates the consumption–enhancing effects of both formal and informal social networks, with notable variations observed across different social networks.

Key words:

formal network, informal network, network characteristics, household consumption, digital technology