Can Internet Use Boost Rural Household Consumption? Evidence from China’s Household Panel Data

Xiaoqing Ling

doi:10.6981/FEM.202501_6(1).0004

Authors

Xiaoqing Ling

DOI:

https://doi.org/10.6981/FEM.202501_6(1).0004

Keywords:

Internet Use; Rural Household Consumption; Consumption Structure.

Abstract

Improving the consumption of rural households in China has long been considered crucial to the process of economic growth and structural transformation. The popularity of Internet could potentially increase rural consumption. This paper presents an empirical analysis of the effect of Internet use on rural household consumption, using CFPS data from 2014 to 2018. The study reveals that Internet use has a significant positive impact on rural household consumption, even after controlling for a vector of other factors. Robustness tests were conducted using PSM, IV method, and the replacement variable approach, and the results of these tests support the core findings of this paper. The paper examines the influence of the Internet on household consumption structure. The findings suggest that the Internet has a greater impact on developmental consumption than survival consumption, indicating that Internet can optimize household consumption structure. Heterogeneity analyses demonstrate that Internet use has a significant boosting effect on high-income households as well as on households headed by people with junior high school education. Our findings contribute to the literature on rural consumption and have important implications for other countries.

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