Does the Level of Financial Cognition Affect the Income of Rural Households? Based on the Moderating Effect of the Digital Financial Inclusion Index

Financial cognitive ability is an important part of human capital, which has a direct impact on household income. The dual differences composed by rural residents’ cognition level and residents’ income make the relationship between the two complicated. Based on the analysis of the impact of financial cognitive level on rural household income, this paper takes into account the individual heterogeneity of financial cognition to build an unconditional quantile regression (UQR) model through the micro data of the China Household Financial Survey Project (CHFS). Incorporating the background of the rapid development of digital finance, this paper also studies the impact of rural residents’ financial cognition on household income. The empirical results of the article have the following conclusions: First, on the whole, the improvement of financial cognitive level promotes the increase of rural household income, but this promotion has significant differences at different quantile levels of household income. Second, the digital financial inclusion index in the region has a positive moderating effect on the impact of financial cognition on the income of rural households. Third, the heterogeneity of the impact of financial cognition on the income of rural households is reflected in the two aspects of regions and household assets.