Abstract: Social credit construction is an important basis for improving market efficiency and promoting economic development. Based on the data of the China Household Finance Survey Project (CHFS), this paper empirically examines the effect and mechanism of social credit on household consumption. It is found that the optimization of social credit environment can significantly improve the per capita consumption level of households, and the conclusion is still valid after robustness test and endogeneity processing. The mechanism analysis shows that the optimization of social credit environment can promote the technological innovation of enterprises, improve the quality of products and services from the supply side, and promote consumption. At the same time, it can also promote consumer credit, ease household capital constraints from the demand side, and promote consumption. Further analysis shows that the driving effect of social credit improvement on residents’ consumption is more obvious in urban households, households with low dependency ratio and households of workers in formal units. From the institutional perspective of social credit, this paper expands the feasible path to promote residents’ consumption, and provides experience for optimizing the supply of social credit system and enhancing the basic role of consumption.

Key words: social credit, household consumption, enterprise innovation, consumer credit, expand domestic demand