Impact of rural households' digital ability on their production efficiency in China

Abstract

AbstractRural digitalization has become a key part of modernization in China. However, this rural digitalization follows a top‐down approach, from government guidance to private construction. Rural households' digital abilities have not received sufficient attention. This study explores rural households' digital abilities and their impact on production efficiency. One thousand eight hundred and seventy households are grouped into digital households (who have access to both digital and traditional channels) and traditional households (who only access traditional channels) based on their access to information channels for comparative analysis. The two‐parameter item response theory is applied to measure digital ability; stochastic frontier models are constructed to test the impact of digital ability on production efficiency; and a stochastic meta‐frontier approach is used to compare the efficiency between groups. The results indicate that: (1) digital households have stronger digital abilities than traditional households. (2) Digital ability is positively correlated with production efficiency. This effect is most evident among traditional households, followed by social households (digital households who use more social channels than nonsocial channels), and finally, nonsocial households (digital households who use more nonsocial channels). (3) Human capital (education, health, and skills) of laborers, off‐farm work, and village internet infrastructure all promote efficiency significantly. Research findings can help policymakers formulate targeted interventions to improve rural households' livelihoods.