Impact of women’s use of digital finance on household consumption expenditure in India: a propensity score matching approach

Consumption is a strong factor driving India's economic growth. The emergence of digital services has transformed individuals' transaction behavior. Among them, its impact on women's consumption behavior is particularly significant. This paper examines the impact of digital financial services adoption on women's household expenditure behavior. The analysis focuses on four categories of household expenditures: necessities, homegrown products, durable goods and non-durable goods. Using the 2019 All India Debt and Investment Survey (AIDIS), the study employs the propensity score matching estimator to account for the selection bias associated with adopting digital financial services. The empirical results suggest that women who access to digital financial services exhibit a 42 percentage points higher monthly per capita consumption expenditure in a household than those who do not use. The robustness of result is shown by applying different matching methods with sensitivity analysis. The study suggests that there is a need to increase supply-side efforts and reduce societal and cultural barriers prevalent in Indian households, particularly to provide specialized support for poor, rural, and less-educated women. Our study addresses Sustainable Development Goals (SDGs) 3 and 5.