The nexus between internet use and consumption diversity of rural household

Abstract

Exploring approaches to improve rural household well-being has always been an important task. This research investigates the effect of Internet use on rural household well-being measured by household consumption diversity, utilizing the 2016, 2018, and 2020 China Family Panel Studies survey data. To assess rural household consumption diversity, we employ the Simpson index and Shannon−Weaver index. To address the endogeneity of Internet use, we regress an instrumental variable-based two-stage least square (2SLS) method. The results show that Internet use substantially improves rural household consumption diversity. The disaggregated analysis suggests that low-income and small households in Central China benefit the most in consumption diversity improvement from using the Internet. Moreover, the mechanism analysis results show that household deposits and households’ beliefs about accessing commercial activities can positively mediate the relationship between Internet use and consumption diversity of rural household. Our findings provide new evidence for the literature on the role of Internet use in improving household consumption diversity in rural China.