Abstract: Service consumption is a key driver for boosting consumption and expanding domestic demands. As a spatial carrier of a better life, cities play a crucial role in influencing household service consumption. This paper conducts an empirical research based on the city data from 2012 to 2018 and the data from the China Household Finance Survey (CHFS), the findings reveal that the expansion of city size can significantly promote household service consumption. However, this effect varies structurally, notably increasing the expenditures on household education and entertainment, healthcare, equipment maintenance, and domestic services, while suppressing spending on transportation and communication. Further analysis of the mechanisms reveals that the expansion of city size can boost service consumption by improving service supply on the supply side and enhancing demand for market services on the demand side due to increased commuting costs. The impact of urban size expansion on service consumption exhibits heterogeneity among households and regional differences. The impact on service consumption expenditure of high-income, high work intensity, and middle-aged and young households is more pronounced, and this impact is more prominent in central cities, the cities with high digital infrastructure capability and high innovation ability. Therefore, efforts should be made to promote the coordinated development of new urbanization construction and the improvement and expansion of service consumption.

Key words: city size, commuting costs, consumption supply, service consumption