The impact of illegal fundraising on the household savings rate

This is the authors' abstract. We don't add key points for this paper.

China has long faced the persistent challenge of low household consumption and high savings rates. This paper empirically examines the impact of illegal fundraising on household savings rate using data from criminal court cases of illegal fundraising and three waves of the China Household Finance Survey (CHFS). The results indicate that illegal fundraising significantly increases household savings, with happiness and risk attitudes being the transmission mechanisms. Heterogeneity analysis reveals that the effect of illegal fundraising on household savings rate is more pronounced among middle-aged and elderly groups, individuals with lower educational attainment, and regions with higher levels of digital financial inclusion. This study provides a new perspective and robust evidence for a deeper understanding of Chinese households’ consumption and savings behaviour, offering further insights to stimulate consumer potential.