The impact of digital village development on farmers’ subjective wellbeing in rural China: the role of core capabilities and income inequality

Digital village development has emerged as a key strategy for advancing comprehensive rural revitalization. However, it remains uncertain whether this initiative promotes equitable benefits for all farmers or exacerbates disparities. This study integrates survey data from rural areas in five provinces with the Peking University Digital Village Index to investigate the impact of digital village development on subjective wellbeing (SWB), with particular attention to capability enhancement and equity concerns. Benchmark regression results show that digital village development enhances rural households’ wellbeing significantly. Specifically, digital infrastructure, economic digitization, governance digitization, and life digitization each contribute meaningfully to improving SWB, with these effects remaining robust across various assessments. Further analysis of the mediation effect model indicate that the digitization of rural governance and daily life substantially increases income and capabilities, thereby enhancing wellbeing by fostering self-improvement and social affiliation. Nevertheless, digital infrastructure and economic digitization also appear to intensify internal inequality, ultimately diminishing overall SWB. Arguably, the development of digital rural areas accelerates income growth among high-income farmers, while offering limited benefits to low-income farmers. Heterogeneity analysis further reveals that the positive impact of digital rural development on SWB is significantly more substantial among regions with higher levels of digital infrastructure, high-income households, and individuals with higher human capital. Collectively, these findings offer theoretical insights into the mechanisms through which digital village development enhances farmers’ subjective wellbeing, while also offering practical guidance for creating equitable and inclusive digital village policies.