Can the income level of rural residents be improved by the Chinese "Broadband Village?": Evidence from a regression discontinuity design of the six pilot provinces.

Abstract

The “Broadband Village” (B&V) initiative is a substantial investment in internet construction in rural areas in six western provinces implemented by the Chinese government since 2014. This study evaluates the effect this policy has had. Panel data of 1,049 counties in China from 2015 to 2019 are used for the regression discontinuity design (RD) to estimate the impact of B&V on the improvement of the income level of rural residents. The results show that, compared to the counties without the B&V policy, the income of rural residents in counties with B&V has increased by 1.468–1.518 times, which is nearly 1.3 times the sample mean of survey data, indicating that the income level of rural residents has been improved significantly by B&V. However, the quantile regression results show that the higher the income level of rural residents, the smaller the effect of this policy. From the dynamic effect of years, the influence curve of B&V on rural residents’ income is an inverted U-shaped, first increasing and then decreasing, and the impact of this policy on the income level of highly-educated farmers is greater. Finally, three different methods are used to verify the robustness of the model.