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The effects of rural e-commerce on income inequality: evidence from the National Rural E-Commerce Comprehensive Demonstration policy in China

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  • Zhang, Yanyuan
  • Wu, Xintong
  • Cai, Rong

Abstract

Mitigating income inequality is essential for promoting rural revitalization and achieving common prosperity. Rural e-commerce has gradually become a significant tool for poverty alleviation and economic inclusion by transforming the traditional agricultural economy through digital technology. Using the National Rural E-Commerce Comprehensive Demonstration (NREC) Policy as a quasi-natural experiment, this study examines the effect of rural e-commerce on income inequality among rural households based on the recentering influence function (RIF) and inverse-probability-weighting (IPW) methods. Findings drawn from the 2010–2020 China Family Panel Studies (CFPS) dataset indicate that the NREC policy significantly reduces total income inequality among rural households. Further analysis reveals that this policy exacerbates operating income inequality by enhancing household entrepreneurship while mitigating wage income inequality by promoting non-agricultural employment. Importantly, the latter effect exerts a more substantial influence on overall income distribution. These findings emphasize the importance of advancing the NREC policy to construct digital villages and achieve common prosperity.

Suggested Citation

  • Zhang, Yanyuan & Wu, Xintong & Cai, Rong, 2025. "The effects of rural e-commerce on income inequality: evidence from the National Rural E-Commerce Comprehensive Demonstration policy in China," Economic Analysis and Policy, Elsevier, vol. 87(C), pages 221-234.
    • Handle: RePEc:eee:ecanpo:v:87:y:2025:i:c:p:221-234
    DOI: 10.1016/j.eap.2025.05.052
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