Digital Adoption levels and income generation in rural households in China

Abstract

With the increasing digital transformation of rural industries, the digital economy is considered a new driving force for consolidating the achievements of eradicating poverty and comprehensively promoting rural revitalization. This study constructs a multidimensional index to measure the digital application level of rural households based on microsurvey data and empirically investigates the economic returns and mechanism of its effects. The results show that digital application significantly improves the economic situation of households. For every 1 unit increase in the level of digital application, per capita net income of households will increase by 0.427 units, and the relative poverty incidence will decrease by 0.421 units. Mechanism analysis shows that the level of digital application in rural households can significantly improve the technical abilities of household members, promote non-agricultural employment, and increase the share of agricultural and sideline business operations, thus improving the economic situation of households. Further research shows that the economic returns obtained from digitization in rural households exhibit significant regional differences. This study provides research support on how to better examine the role of the digital economy for rural households to generate wealth and increase income.