The Impact of Agricultural Digital Transformation on Income Inequality: Evidence From Rural China

ABSTRACT Agricultural digitalization is indispensable for advancing China's agricultural modernization, while it has also caused job displacement and income differentiation in rural labor markets. However, its impact on income inequality and the underlying mechanisms remain under‐explored. Using survey data from 1239 villages across 264 counties in 29 Chinese provinces and cities, this study conducts an empirical test. Based on RIF regression (to address flaws in traditional income inequality modeling), it estimates the effect of agricultural digitalization on rural household income inequality. Results show: (1) Agricultural digitalization significantly boosts income, with a stronger effect on low‐income groups, thereby narrowing income inequality among rural households. (2) Mechanism analysis reveals that it stimulates employment and entrepreneurship, eases financing constraints, and strengthens interest linkages, all of which contribute to reduced inequality among rural households. (3) Heterogeneity analysis finds that its income‐boosting marginal effect is stronger in areas with poor accessibility to administrative facilities, marketplaces, and transportation networks, though it also widens income gaps within the rural population. This study confirms agricultural digitalization as a key driver for tackling rural income inequality in China, and it offers actionable evidence for comprehensive rural revitalization in other developing countries.