E-commerce and the consumption structure of rural households in China

Using the Rural E-commerce Demonstration Counties (REDC) program as a quasi-natural experiment, this study employs a multi-period difference-in-differences (DID) model with data from the China Household Finance Survey (CHFS) between 2013 and 2019 to examine the impact of e-commerce on the consumption structure of rural households. The results show that e-commerce significantly promotes the upgrading of rural households’ consumption structure. Specifically, it increases the share of developmental-type and enjoyment-type expenditures while decreasing that of survival-type expenditures. These findings are robust to a series of robustness checks. Additionally, mechanism analysis indicates that e-commerce contributes to consumption structure upgrading by raising household income, alleviating liquidity constraints, and enhancing financial literacy. Furthermore, heterogeneity analysis reveals that the effect is more pronounced in male-headed and small-sized households. Overall, this study provides compelling micro-level evidence that e-commerce serves as a powerful driver in upgrading the rural consumption structure, underscoring the importance of e-commerce support policies in improving household welfare.