How Does the Adoption of e‐Commerce Impact the Selling Prices of Agricultural Products? Empirical Evidence From Apple Farmers in China

Abstract

ABSTRACTThe sale of products through e‐commerce is emerging in rural China, and it cuts out intermediaries and allows farmers direct access to the market. To understand how adopting e‐commerce impacts the selling prices of agricultural products and who benefits more from adopting e‐commerce, we interviewed 480 apple farmers from the three representative provinces in China. The Propensity Score Matching approach combined with sensitivity analysis is employed to address the potential self‐selection bias in estimating the impacts of adopting e‐commerce. We find that adopting of e‐commerce drives significant increases in the selling prices of apple products, including the average price, the maximum price and the minimum price. The heterogeneity analysis suggests that the adoption of e‐commerce has significant heterogeneous effects on selling prices across various ages and education of household heads, land area, distance to the local town centre and social capital. The analysis of potential pathways reveals that increases in selling prices are attributed to farmers achieving more marketing flexibility through more adaptable sale times and extended sale periods due to adopting e‐commerce. The research findings provide rigorous evidence on optimal future policy design regarding the development of rural e‐commerce for poverty alleviation in China and other developing countries.