Green Innovation Efficiency and Consumption Upgrading: Evidence from China

Green innovation is an important means of mitigating environmental pollution, improving production efficiency, and promoting high-quality economic development. Using prefecture-level city data and China Family Panel Studies (CFPS) data from 2010 to 2022, this study applies the Super-SBM model to measure urban green innovation efficiency and examines its effects on residents’ consumption levels and household consumption structures. The results show that (1) green innovation efficiency significantly increases consumption among urban residents and urban households, whereas its effects on rural residents and rural households are not statistically significant; (2) green innovation efficiency significantly reduces the share of subsistence-oriented consumption while increasing the shares of housing, development-oriented, and tourism consumption, thereby promoting a shift in household expenditure from basic needs toward development- and enjoyment-oriented consumption; (3) wage income and housing debt constitute two distinct transmission channels. Higher wage income facilitates development- and enjoyment-oriented consumption, whereas housing debt increases the share of housing consumption and exerts a crowding-out effect on development-oriented and tourism consumption; and (4) green innovation efficiency has a more pronounced effect on development-oriented and tourism consumption among young and high-income households. For middle-aged and older households, as well as low-income households, the effects of green innovation are reflected more strongly in an increase in the share of housing consumption. The findings provide important empirical evidence that green innovation contributes to improving residents’ quality of life.