Digital financial inclusion and household energy poverty: Evidence from China

This paper examines the impact of digital financial inclusion (DFI) on household energy poverty. We develop a simple theoretical model to explain the energy poverty alleviation effect of DFI. Using multidimensional household energy consumption survey data, we find that DFI reduces the incidence of household energy poverty by about 33.5 % and the intensity of energy poverty by 24.6 %, driven mainly by improvements in energy efficiency and an increase in household off-farm work, resulting in a stronger role in rural and low-income groups. However, the threshold model demonstrates that the Internet and digital tools are a prerequisite for this pro-poor energy effect to be realized. Notably, DFI, while exhibiting spatial spillover effects, exacerbate energy poverty in neighboring areas due to the siphoning effect.