How Does E-Commerce Policy AffectConsumption Disparities of RuralHouseholds?- Evidence from China

Zhang Cheng1, Weng Xiyan*2

1 School of Business, Shantou University, Shantou, China

2 Institute for Economic and Social Research, Jinan University, Guangzhou, China

Abstract: In the context of China’s ongoing efforts to promote countryside revitalizationand facilitate domestic economic circulation, it is of great significance to reduce theconsumption disparity among rural households and unleash the consumption potentialin the countryside. Based on data from China Family Panel Studies, this paper adoptsa staggered difference-in-differences method to assess the impact of the e-commerceto enter rural areas on the consumption disparity among rural households. Findings:the comprehensive demonstration work of promoting e-commerce to enter rural areashas reduced the consumption disparity among rural households through the followingmechanisms. Firstly, this policy initiative has mitigated the consumption-inhibiting effect onrural household consumption due to the local market size and external market accessibilityby promoting the distribution of consumer goods to villages. Secondly, this policyinitiative has also increased the agricultural income of rural households and reduced theirconsumption disparity by distributing farm produce to cities and enhancing the agriculturalincome of rural households. Moreover, the work is characterized by inclusive growth and isnot susceptible to the “elite capture” phenomenon.

Keywords: E-commerce to enter rural areas, consumption disparity among rural

JEL Classification Codes: O55, D63

DOI: 10.19602/j.chinaeconomist.2024.07.06