Assessing the Effects of Population Ageing and the Digital Economy on Consumption in Henan, China: An ARDL Approach

Introduction: The interaction of the Digital Economy (DE), Consumption (CO), and Population Ageing (PA) is of great significance in addressing economic development, enhancing people's livelihoods, and promoting social harmony in Henan, China. Aim: This paper aims to analyze thecausal relationship of PA and DE toward CO, to identify strategies to leverage the digital economy to address the economic challenges posed by ageing and to enhance consumption. Method: The study transforms annual data using Eviews for quarterly time series data from 2006 to 2023, constructs a digital economy index through the entropy method. It applies the ARDL model to explore both short-and long-run dynamics among the variables. Findings: This study reveals that population ageing consistently reduces consumption both immediately and over time,while the digital economy initially suppresses consumption but its negative effect gradually weakens. The findings highlight the need for proactive ageing policies and accelerated digital adoption to sustain consumption growth amid demographic and technological changes. Conclusion: Enhancing digital literacy and infrastructure for the elderly enhances their participation in the digital economy and stimulates Consumption. It recommends focusing on sectors where elderly Consumption is expected to grow and promoting tailored financial products for the Aging population to encourage spending in alignment with the Development Plan for the Elderly in Henan Province under the 14th Five-Year Plan. Originality and Value: The study provides insights into regional strategies for adapting to demographic shifts.It supports policy formulation aimed at promoting inclusive digital development and boosting consumption among the ageing population in Henan.