How does the climate change affect household consumption? Evidence from China

Climate change intensifies extreme heatwaves, leading to adverse impacts that influence household consumption decisions. This study examines climate change’s effects on Chinese household consumption by using four waves of China Family Panel Survey(CFPS) data(2016–2022) and meteorological data from the U.S. NOAA. Our findings indicate that climate change significantly reduces household spending, with greater effects on rural households, those with poor health, lower education, and lower wages. This mainly caused by diminishing household income , and dampening future expectations, but adaptive behaviors help mitigate it. Hetero-geneity analysis shows that persistent climate change exacerbates consumption declines, though greater adaptive capacity alleviates its impact. Additionally, population concentration intensifies climate-related risks through heat island and rain island effects, whereas industrial clustering mitigates these negative impacts. These findings highlight the importance of increasing fiscal support for ecological protection and low-income households, expanding climate-related infrastructure subsidies, and promoting green industrial clusters to stabilize employment and income.