Study on the Relationship Between Digital Inclusion, the Level of the Digital Economy and Rural Household Consumption

Abstract

It is crucial to expand domestic demand and enhance the driving effect of consumption on economic development in order to achieve sustainable economic growth in China. There is considerable scope for improvement in the consumption level of rural households when compared with that of urban households. This paper employs data from 2104 rural Chinese households to investigate the impact of digital inclusion on rural households’ consumption expenditures and to consider the moderating effect of the development of the digital economy. The findings are intended to provide useful guidance for the promotion of digital inclusion and the growth of rural households’ consumption. The study finds that digital inclusion significantly promotes rural households’ consumption expenditures, particularly for enjoyable consumption. Furthermore, the level of regional digital economic development exerts a positive moderating influence on the impact of digital inclusion on rural households’ consumption. Additionally, there are notable differences in the impact of digital inclusion on the consumption of households with varying levels of assets. Therefore, boosting rural residents’ acceptance and utilization of digital technology, refining the digital financial service system and infrastructure, and providing policy support for the development of digital inclusion can promote sustained growth in rural household consumption in China.

1. Introduction

Against the backdrop of a sustained downturn in the global economy in recent years, increasingly evident geopolitical influences, and rising protectionism, the report to the 20th National Congress of the Communist Party of China indicates that efforts are being made to expand domestic demand and enhance the fundamental role of consumption in economic development. As the primary driver of economic growth, consumption has emerged as a pivotal engine propelling China’s economic expansion. According to data from the China National Bureau of Statistics, final consumption expenditure accounted for 82.5% of economic growth in 2023, underscoring the crucial role of consumption in maintaining economic stability.

However, the growth in consumption is accompanied by an imbalance between urban and rural consumption. In 2023, the per capita consumption expenditure of rural residents was 18,175 yuan, while that of urban residents was 32,994 yuan. This indicates that the level of consumption in rural areas was only 55% of that in urban areas. In order to enhance the consumption level of rural households, China has implemented a series of robust measures, including the implementation of the rural revitalization strategy, the promotion of digital rural areas, and the reinforcement of infrastructure construction. The rapid evolution of digital technology has led to significant social transformations worldwide. According to the “Survey and Analysis Report on Digital Literacy in China’s Digital Villages in the Context of Rural Revitalization Strategies”, published by the Informatization Research Center of the Chinese Academy of Social Sciences in 2021, urban Chinese residents have an average digital literacy score of 56.3 out of 100, while rural residents have an average score of 35.1. This substantial 37.5% gap in digital literacy between urban and rural populations highlights a significant imbalance in the development of digital literacy within different contexts. With the development of the digital economy, the concept of digital inclusion has gained attention in academia. Digital literacy pertains to individual capabilities, while digital inclusion encompasses a broader range of subjects, including individuals, society, the environment, and policies. The fundamental objective of digital inclusion is to ensure equitable access to and utilization of digital technology resources for all social groups, particularly those that have historically been marginalized [1]. A substantial body of research has demonstrated that enhancing digital literacy can stimulate rural consumer spending. Consequently, it is pertinent to investigate whether digital inclusion exerts an influence on rural consumer spending as a more encompassing concept than digital literacy.

Given the importance of rural household consumption and the limitations of current research, this paper proposes the following research questions: (1) How is the level of rural household consumption quantified? (2) What methodologies are employed to assess the digital inclusion index? (3) Does digital inclusion affect the level of rural household consumption? (4) What role does the level of digital economic development play in the process of digital inclusion affecting the level of rural household consumption? (5) How can enhancing digital inclusion contribute to an increase in rural household expenditure?

The contributions of this paper are twofold: first, it introduces a novel theoretical framework that examines the impact of digital inclusion on rural household consumption, clarifying the regulatory mechanisms of the digital economy; second, it offers precise strategies for promoting rural consumption growth by enhancing the capacity to apply digital technology, refining the digital financial system, and implementing targeted policies to support rural revitalization and sustainable economic development. In the subsequent sections, this study will conduct a comprehensive review of the existing literature and provide an in-depth exposition of the theoretical foundation and research hypotheses. Following this, the paper will detail the research design, including the data collection methods, analysis techniques, and other relevant aspects. Finally, the paper will summarize the research findings and propose innovative policy recommendations.

2. Literature Review

2.1. Relevant Studies on the Consumption Level of Rural Households

In the contemporary phase of economic advancement, the expenditure of consumption has emerged as a pivotal catalyst for economic expansion. In particular, the consumption behavior of rural residents, as a pivotal component of the consumer group, exerts a pivotal influence on the comprehensive growth of the national economy in China. Therefore, numerous scholars have explored in depth the factors affecting consumption in rural areas. A comprehensive review of the existing literature revealed that scholars examined the key factors influencing rural household consumption. The literature drew on various theoretical frameworks. These key factors included internal personal factors, such as employment and income levels [2], psychological perceptions regarding consumption uncertainty [3], and external environmental factors, including inclusive financial development [4,5], information technology advancement [6], e-commerce platform development [7], distribution system construction [8], social security systems [9], urbanization processes [10], and other external environmental factors. In evaluating the consumption level of rural households, Yao (2023) employed the per primary disposable income of rural residents as a metric [11], Lu (2022) utilized the rural per primary consumption expenditure at the provincial level [7], and Sun (2024) adopted the annual per primary living consumption expenditure of rural residents as a measure [12]. In recent years, scholars focused their research efforts on understanding changes in rural household consumption patterns, examining shifts in the consumption structure, and analyzing consumer behavior patterns. The ongoing implementation of the rural revitalization strategy and the emergence of the digital economy infuse the field of rural household consumption with an unprecedented vitality and complexity. In light of these developments, it is evident that new research perspectives will contribute to a deeper and more nuanced understanding of rural consumption behavior.

2.2. Relevant Studies on the Relationship Between Digital Literacy and Rural Household Consumption

In the context of the ever-changing digital technology, digital literacy has become a crucial skill for individuals to possess. It not only influences the acquisition and processing of information but also significantly impacts consumer behavior. Research by Smith et al. indicated that digital literacy plays a pivotal role in shaping an individual’s decision-making process regarding consumption. Consumers with higher levels of digital literacy were more adept at utilizing digital technologies to critically assess and filter information, thereby mitigating the effects of misleading advertisements and misinformation [13,14,15]. Liu’s research indicated that as digital literacy increased, consumers also enhanced their comprehension and utilization of digital financial products, which subsequently elevated household consumption levels [16]. Furthermore, Wang and Chen’s research offered a comprehensive examination of the macro-level shifts in consumption patterns. The advancement of digital literacy has significantly facilitated consumers’ acceptance and reliance on innovative consumption methods, such as digital payments and online shopping, thereby further driving the transformation of these patterns [17]. Notably, scholars like Cai Yuhan have also contributed unique perspectives by suggesting that fostering digital literacy can enhance labor productivity, raise personal income, and indirectly unlock potential for increased consumption [18].

2.3. Relevant Studies on Digital Literacy and Digital Inclusion

In recent years, the swift advancement of digital technology has prompted a heightened emphasis on digital literacy and digital inclusion within the realms of digital governance and social integration. Digital literacy was conventionally defined as the ability to understand and utilize various forms of digital information [19]. As defined by the American Library Association, digital literacy encompasses a spectrum of competencies that includes retrieving, interpreting, and evaluating digital information, as well as applying these skills for effective communication and collaboration [20]. The Global Framework for Digital Literacy, established by the UNESCO Institute for Statistics, delineates digital literacy into 7 distinct domains and 26 specific competencies [21]. These include proficiency in operating equipment and software and information and data literacy, as well as communication and collaboration skills. By contrast, the European Union’s Dig Comp version 2.2 framework encompasses five core components: information and data literacy, communication and collaboration literacy, digital content creation literacy, digital safety awareness, and problem solving capabilities [22].

Compared to digital literacy, digital inclusion is a broader concept that not only focuses on cultivating individual skills, but also aims to eliminate the digital divide between different groups and promote the development of digital inclusion through policy adjustments and environmental optimization. The National Digital Inclusion Alliance (NDIA) in the United States characterizes it as a process that guarantees access to and utilization of information and communication technologies (ICTs) for all individuals and communities, particularly those from marginalized backgrounds [23]. Hyytinen et al. underscored that delivering digital public services to digitally disadvantaged populations constitutes a pivotal area of inquiry within the realm of digital inclusion research [24,25]. Digital literacy is fundamentally intertwined with digital inclusion, where the former acts as a crucial prerequisite for the latter. In the absence of essential digital literacy, individuals face considerable obstacles in effectively leveraging digital technologies, hindering their ability to fully integrate into a digital society and attain true digital inclusion. Conversely, fostering digital inclusion can subsequently enhance overall levels of digital literacy, thereby establishing a virtuous cycle [26]. The Australian Digital Inclusion Index (ADII), which encompasses three dimensions—accessibility, affordability, and digital competence—serves as a quantitative framework for assessing the access to and utilization of digital resources across various regions and demographics [27].

2.4. Evaluation of Existing Studies

A review of the existing literature revealed that numerous scholars investigated the factors influencing rural residents’ consumption levels, the measurement of consumption levels, and consumption transformation. Their findings indicated that rural residents’ consumption levels were influenced by various factors, including income, e-commerce platforms, and digitally inclusive finance. Additionally, scholars investigated the correlation between digital literacy and rural household consumption, underscoring the pivotal role of digital literacy in influencing consumption decisions, enhancing consumption levels, and shaping alterations in consumption patterns. However, digital literacy primarily concentrates on individual capabilities, whereas the subject of digital inclusion encompasses a more diverse range of elements, occurring at varying levels, including the individual and society. Its connotation and extension are more extensive. The academic community has yet to reach a consensus on issues such as the construction of a digital inclusion index system and the promotion of digital inclusion to bridge the urban–rural digital divide and achieve steady economic progress. Further discussion is still required.

This paper will calculate the digital inclusion index and categorize consumption expenditures into three dimensions—basic, developmental, and enjoyable—in order to explore the relationship between digital inclusion and rural residents’ consumption. The goal is to identify strategies for improving the consumption level of rural residents and thus promoting sustained and healthy economic growth.

3. Theoretical Frameworks and Research Hypotheses

3.1. Theoretical Framework

The triple interaction theory was proposed by Bandura, an American psychologist, who argued that human agency is a product of the interaction between personal, behavioral, and environmental factors that play a role in the structure of interaction [28]. In the context of digitalization, addressing the digital divide in rural areas and achieving digital inclusion is not only an integral component of integrating urban and rural development but also represents the pinnacle of social inclusion in the digital age. It serves as a catalyst for transforming the digital disadvantage experienced by rural residents into digital inclusion [29]. The formation of the rural digital divide results from the interaction between individual, social, and environmental factors [30,31]. Digital inclusion, acting as a bridge that connects individual capacity improvement with social and equitable development, must be achieved through the systematic integration of individual participation, institutional support, and environmental optimization [32]. By integrating the precautionary savings theory and relative income consumption theory, the research scope broadens to encompass economic behavior, revealing the profound impact mechanism of digital inclusion on rural residents’ consumption. This mechanism is shaped by the interplay between risk perception (environmental uncertainty) and consumption decisions (individual behavior). Therefore, this paper takes the triple interaction theory as the model reference to study the path of rural residents’ realization of digital inclusion, as well as the path of digital inclusion’s influence on rural residents’ consumption. At the same time, the precautionary savings theory and the relative income theory are introduced based on the triple interaction framework. As illustrated in Figure 1.

3.2. Hypotheses

Promoting digital inclusion is important to reduce rural residents’ uncertainty about the future, thereby reducing their precautionary savings and increasing their aggregate consumption. The theory of precautionary savings states that rural residents, in response to uncertain future events, will save an appropriate amount of money to protect against a sharp decline in their future consumption level. They plan their life-cycle savings-to-consumption ratio based on their expected lifetime income level to maintain a stable marginal propensity to consume [33]. In the digital age, information has become a highly valuable resource and asset. By promoting digital inclusion, we can encourage rural residents to actively participate in it, thereby bridging the digital divide and ensuring their right to information equality [34]. Promoting digital inclusion makes it easier for rural residents to access all kinds of consumer information, understand market dynamics and product features. They can easily browse various e-commerce platforms and compare the price, performance, and quality of different products through various channels such as smartphones, TV and the Internet to make more informed consumer decisions [35]. Therefore, strengthening the promotion of digital inclusion can help reduce the information consumption gap among rural residents and better integrate them into the overall economic and social development. This will not only reduce their uncertainty about the future, thereby reducing precautionary savings, but also increase their willingness and confidence to consume, thereby contributing to an increase in their overall consumption levels. Based on the above analysis, hypothesis H1 is proposed.

Hypothesis 1.

Digital inclusion significantly contributes to the overall consumption level of rural households.

According to the theory of relative income consumption, the consumption expenditure of rural residents not only depends on their own income level, but also is influenced by the consumption expenditure of neighboring groups [33]. Internet communication plays an active role in raising rural residents’ awareness of their own relative income level, making them believe that they have certain economic strength. As rural residents actively participate in Internet activities, the demonstration effect of other people’s consumption behavior on the Internet often stimulates them to increase relevant consumption activities [36]. With the improvement of living standards, the material living conditions of rural residents have become increasingly homogeneous, and it has become difficult for them to compare things in the field of basic consumption. However, the innovations in the fields of development and enjoyment-type consumption provide a material basis for rural residents to follow the herd and compare with each other, and consumption in these fields is more elastic [37]. Therefore, easy access to consumption information is likely to stimulate rural residents to increase developmental and enjoyable consumption. Based on the above analysis, hypothesis H2 is proposed.

Hypothesis 2.

Digital inclusion promotes developmental and enjoyment-oriented consumption among rural households.

With the advent of the digital era, the development of the digital economy has become an important influence on the level of consumption [38]. In the process of promoting rural household consumption through digital inclusion, the digital economic development index can not only directly affect the construction of regional digital infrastructure but also likely impact residents’ awareness, thereby influencing the extent to which digital inclusion benefits rural household consumption. Specifically, the digital literacy fostered by the digital economy, including skills training programs and the popularization of digital payments, has the potential to enhance farmers’ awareness of digital risks and their trust in consumption [39]. New consumption models emerging from the regional digital economy, such as live-streaming e-commerce and community group buying, also play a significant role. These models can help strengthen rural residents’ consumption channels and willingness [40]. Furthermore, the construction of regional digital infrastructure, such as network coverage and the widespread adoption of terminal equipment, directly influences the ease with which rural households can access consumption information [41]. Accordingly, Hypothesis 3 is proposed and drew the causal path diagram of this paper as Figure 2.

Hypothesis 3.

The level of development of the regional digital economy plays a positive moderating role in the process of digital inclusion affecting the consumption level of rural households.

4. Research Design

4.1. Data Sources

The data in this paper are from the sixth nationwide research of the “China Family Panel Studies” (CFPS) project organized by the China Center for Social Science Surveys at Peking University. The research used the residential map method sampling frame and implemented probability sampling to systematically collect and examine information on various aspects of Chinese residents’ economic and non-economic benefits, economic activities, access to education, population migration, and physical and mental health in 25 provinces (autonomous regions and municipalities directly under the central government) across the country. The research sample is generally highly representative. A total of 2104 rural households were obtained in this paper after excluding some samples with missing variables.

4.2. Selection of Variables

4.2.1. Explanatory Variable

In this paper, we have chosen rural household consumption expenditure as the explanatory variable. In order to explore the structural differences within consumption in depth, total household consumption is further subdivided into three main categories: basic consumption, developmental consumption, and enjoyable consumption [42,43].

4.2.2. Main Explanatory Variables

The core explanatory variable of this paper is the Digital Inclusion Index (DI), which is divided into three dimensions: individual, societal, and environmental, based on the triple interaction theory. With reference to the role path, this paper constructs a digital inclusion index system by carefully selecting some questions in the 2020 CFPS questionnaire. Among them, when measuring personal digital inclusion, this paper selects questions with reference to the construction of the digital literacy index system. Personal Digital Inclusion (PDI) is measured using two key indicators: one is “whether to use mobile devices (e.g., cell phones, tablets) to access the Internet”, and the other is “whether to use computers to access the Internet”. Social Digital Inclusion (SDI) is measured using the indicator “how important the Internet is in everyday life”. For Environmental Digital Inclusion (EDI), we focus on “the overall condition of public facilities such as education, healthcare, and transportation in the vicinity of the village or subdivision where you live” [44]. Finally, the entropy weight method is used to determine the weight of each indicator, and the Digital Inclusion Index is calculated by combining the entropy weight TOPSIS method.

4.2.3. Moderating Variables

The Regional Digital Economy Development Level (DEDI) refers to the development status, scale, and maturity of provinces, autonomous regions, and municipalities directly under the central government in the field of the digital economy.

4.2.4. Control Variables

In this article, we define the financial respondent in the CFPS questionnaire as the head of the household and carefully select eight key indicators as control variables based on the dual dimensions of the head of the household and the family. At the household head level, elements such as age, gender, political profile, health status, the highest level of education, and marital status are selected with reference to previous studies; at the household level, two core indicators, household size and total household financial assets, are considered. The definitions of the variables and their descriptive statistical indicators can be found in

Table 1. Variable definitions and descriptive statistics.

Variables	Define	Sample Size	Mean	Min	Max	Standard Deviation
Total household consumption expenditure	Natural logarithm value	2104	10.64	0	13.69	0.95
Basic consumption	Natural logarithm value	2104	10.21	0	13.60	0.95
Developmental consumption	Natural logarithm value	2104	6.71	0	12.39	2.88
Enjoyable consumption	Natural logarithm value	2104	8.53	0	13.53	1.76
DI	Digital Inclusion Index	2104	1.06	0.6	1.8	0.23
DEDI	Regional Digital Economy Development Level	2104	30.754	13.8	65.3	12.11
Gender	0 = Female, 1 = Male	2104	0.59	0	1	0.49
Age		2104	43.27	16	79	11.93
Political profile	0 = Not the Chinese Communist Party 1 = The Chinese Communist Party	2104	0.1	0	1	0.297
Highest degree	0 = Illiterate/semi-illiterate, 1 = Nursery school, 2 = Kindergarten/pre-school, 3 = Elementary school, 4 = Junior high school, 5 = High school/secondary/technical/vocational high school, 6 = Post-secondary school, 7 = Bachelor’s degree, 8 = Master’s degree, 9 = Doctorate, 10 = No schooling at all	2104	3.84	0	10	1.59
Marital status	1 = Unmarried, 2 = Married (with spouse), 3 = cohabiting, 4 = Divorced 5 = Widowed	2104	2.06	1	5	0.68
Health status	1 = Very healthy, 2 = Very healthy, 3 = Relatively healthy, 4 = Average, 5 = Unhealthy	2104	2.89	1	5	1.15
Household size		2104	3.7	1	15	1.97
Total household financial assets	Natural logarithm value	2104	7.73	0	15.07	4.67

.

4.3. Model Setting

In order to investigate the impact of digital inclusion on the consumption level of rural households, the OLS Regression Model of digital inclusion on the consumption level of rural households is constructed as follows:

$$Y_i={\beta }_0+{\beta }_1{X}_i+{\beta }_2{\omega }_i+U_i$$

(1)

where the left side of Formula (1) contains the explanatory variables representing the total consumption expenditure of household $i$, the basic consumption, the developmental consumption, and the enjoyable consumption; in the right side of Formula (1), $X_i$ is the main explanatory variable, representing Digital Inclusion (DI), based on triple interaction theory, where the Digital Inclusion Index consists of Personal Digital Inclusion (PDI), Social Digital Inclusion (SDI) and Environmental Digital Inclusion (EDI). ${\omega }_i$ is each control variable. ${\beta }_0$, ${\beta }_1$, and ${\beta }_2$ is each parameter to be estimated, and $U_i$ is the random error term.

In addition to analyzing the relationship between digital inclusion and rural household consumption expenditures, this paper further analyzes whether the relationship between digital inclusion and rural household consumption expenditures is affected by the moderating effect of regional digital economic development. The model is set up as follows:

$$Y_i={\beta }_0+{\beta }_1{X}_i+{\beta }_2{DEDI}_i+{\beta }_3{X}_i\times {DEDI}_i+{\beta }_4{\omega }_i+U_i$$

(2)

where ${DEDI}_i$ is a moderator variable indicating the level of digital economy development in the province and city where household $i$ is located, and ${\beta }_3{X}_i\times {DEDI}_i$ is the interaction term between household $i$′ s digital inclusion index and the level of digital economy development in the province and city where it is located.

5. Empirical Results and Their Testing

5.1. Regression Results and Analysis

In this paper, Ordinary Least Squares (OLS) regression is conducted with rural household consumption expenditure, basic consumption, developmental consumption, and enjoyable consumption as the explanatory variables, the Digital Inclusion Index as the core explanatory variable, and age, gender, political profile, household size, etc. as the control variables.

Table 2. Benchmark regression results.

Variables	(1)	(2)	(3)	(4)
	Total Household Consumption Expenditure	Basic Consumption	Developmental Consumption	Enjoyable Consumption
DI (x)	0.192 **	0.197 **	0.011	0.340 **
	(3.358)	(3.451)	(0.066)	(3.215)
PDI	0.229 **	0.235 **	−0.004	0.406 **
	(3.133)	(3.228)	(−0.058)	(3.001)
SDI	0.027	0.035 *	−0.075	0.048
	(1.620)	(2.143)	(−1.488)	(1.571)
EDI	0.056 **	0.048 *	0.146 *	0.097 *
	(2.648)	(2.269)	(2.275)	(2.492)
Age	−0.010 **	−0.011 **	0.006	−0.018 **
	(−5.608)	(−6.051)	(1.061)	(−5.383)
Gender	0.004	−0.006	0.136	−0.057
	(0.099)	(−0.155)	(1.036)	(−0.795)
Political profile	−0.002	0.001	0.156	−0.000
	(−0.067)	(0.110)	(0.760)	(−0.025)
Health status	−0.007	−0.013	0.001	−0.001
	(−0.400)	(−0.712)	(0.011)	(−0.042)
Highest degree	0.014	0.011	0.014	0.017
	(1.072)	(0.815)	(0.020)	(0.697)
Marital status	0.035	0.026	0.452	−0.081
	(1.313)	(0.940)	(1.165)	(−1.170)
Household size	0.122 **	0.112 **	0.215 **	0.230 **
	(11.065)	(10.377)	(7.273)	(11.809)
Total household financial assets	0.046 **	0.046 **	0.047 **	0.087 **
	(9.917)	(9.990)	(3.241)	(10.543)
DEDI	0.005 **	0.006 **	−0.011 *	0.005
	(3.398)	(4.240)	(−2.197)	(1.831)
Constant	10.015 **	9.675 **	6.592 **	7.781 **
	(66.923)	(64.643)	(21.897)	(26.185)
Observations	2104	2104	2104	2104
R-squared	0.017	0.018	0.004	0.016

** p < 0.05; * p < 0.1.

presents the findings of the baseline regression, which offers an initial assessment of the influence of digital inclusion on total rural household consumption expenditure and various dimensions of consumption expenditure. First, it can be observed that there is a significant impact of digital inclusion on the total rural household consumption expenditure. As evidenced in Table 2, the regression coefficient of the digital inclusion index on total consumption expenditure is 0.192. This indicates that for every unit increase in the digital inclusion index, the total consumption expenditure increases by 19.2%. Furthermore, this relationship is statistically significant at the 5% level, thereby substantiating the assertion that digital inclusion has a considerable positive influence on the total consumption expenditure of rural households. It also implies that the total consumption expenditure of rural households with a high level of digital inclusion is higher. In particular, the regression coefficients of personal digital inclusion and environmental digital inclusion on total consumption expenditures are 0.229 and 0.056, respectively, and are significant at the 5% level. This evidence substantiates the assertion that the active integration of rural residents into digitalization and the construction of digital facilities in rural areas have a significant positive impact on the total consumption expenditures of rural households.

Second, the expansion of digital inclusion has led to a notable increase in both basic and enjoyable consumption among rural households. Table 2 indicates that the regression coefficients of the digital inclusion index on basic consumption and enjoyable consumption are 0.197 and 0.340, respectively. The promotion effect on enjoyable consumption is more pronounced in comparison, with enjoyable consumption increasing by 34.0% for every unit increase in the digital inclusion index, while basic consumption increases by 19.7%. This may be attributed to the fact that basic consumption primarily comprises essential items like clothing, food, housing, and transportation. These necessities are fundamental material needs and thus exhibit relative inelasticity. Consequently, the impact of digital inclusion on this type of consumption is less pronounced. By contrast, enjoyable consumption encompasses goods and services that enhance consumers’ quality of life and satisfy their hedonic desires. This category of consumption is relatively elastic. While the concept of enjoyable consumption among rural families has historically been relatively conservative, the promotion of digital inclusion has provided them with greater exposure to new experiences and opportunities to upgrade their consumption patterns. As illustrated in Table 2, digital inclusion has a positive but statistically insignificant impact on rural households’ development-oriented consumption. Developmental consumption primarily consists of expenditures on healthcare and education. Since its pilot launch in 2003, the New Rural Cooperative Medical Insurance (NRCMI) program achieved a participation rate of 99.7% by 2020. The per capita financial subsidy increased from an initial 20 yuan to 640 yuan in 2023, leading to a significant reduction in out-of-pocket medical expenses for rural residents. This shift has transformed household medical expenditure from “essential expenditure” to “supplementary expenditure”, accompanied by a notable decrease in consumption elasticity. Concurrently, following the 2006 policy that eliminated tuition and miscellaneous fees for rural students in compulsory education, the proportion of related expenditures in total education costs decreased from 68% to less than 15%. These policy measures have likely diminished the potential impact of digital technology on developmental consumption.

5.2. Robustness Test and Analysis

The present study draws on existing research to identify the domains of social exclusion of disadvantaged groups in the digital countryside. The aforementioned domains are primarily focused on the sectors of the economy, livelihoods, knowledge, and e-commerce. Based on these four dimensions, the calculation of the core variable, the Digital Inclusion Index, was transformed, and the OLS regression was conducted again.

As illustrated in

Table 3. Robustness test results.

	(1)	(2)	(3)	(4)
Variables	Total Household Consumption Expenditure	Basic Consumption	Developmental Consumption	Enjoyable Consumption
DI2 (x)	0.001 ***	0.000 **	0.098	0.015 *
	(0.005)	(0.022)	(0.028)	(0.028)
Control variable	containment	containment	containment	containment
Constant	0.000 **	0.000 **	0.000 **	0.000 **
	(10.283)	(10.028)	(6.475)	(8.304)
Observations	2104	2104	2104	2104
R-squared	0.149	0.007	0.001	0.003

*** p < 0.01; ** p < 0.05; * p < 0.1.

, the regression coefficients of the transformed digital inclusion index calculation on total consumption expenditure, basic consumption, and enjoyable consumption are all statistically significant, indicating that digital inclusion has a significant and positive impact on the total consumption expenditure, basic consumption, and enjoyable consumption of rural households. These findings prove the robustness of the previous results.

5.3. Moderating Effects and Analysis

This article further incorporates the interaction term between the level of digital economic development and digital inclusion in the province and city where the household is located into the model in order to examine the direction and extent of the role of regional digital economic development in the process of digital inclusion affecting rural household consumption.

As evidenced by

Table 4. Digital economy level of development adjustment effect.

	(1)	(2)	(3)	(4)
	Total Household Consumption Expenditure	Basic Consumption	Developmental Consumption	Enjoyable Consumption
DI (x)	0.000 ***	0.000 ***	0.762	0.000 ***
	(0.454)	(0.471)	(0.085)	(0.844)
DI × DEDI	0.001 ***	0.011 **	0.347	0.004 *
	(0.029)	(0.024)	(0.021)	(0.039)
Control variable	containment	containment	containment	containment
Observations	2104	2104	2104	2104
R-squared	0.052	0.053	0.001	0.033

*** p < 0.01; ** p < 0.05; * p < 0.1.

, the coefficient of the interaction term between digital inclusion and the level of digital economy development is markedly positive, thereby indicating that the moderating effect of the level of digital economy development is both positive and significant. In other words, the advancement of the digital economy markedly amplifies the impact of digital inclusion in stimulating rural household consumption.

To more effectively illustrate the influence of digital economic development on the process of digital inclusion and its impact on rural household consumption growth, this article presents a simple slope diagram based on the data analysis results (Figure 3).

The data presented in Figure 3 demonstrate that an escalation in the level of digital economy development is accompanied by a corresponding augmentation in the promotional impact of digital inclusion on rural household consumption. The advancement of the digital economy serves to reinforce the beneficial influence of digital inclusion on rural household consumption, particularly in areas where the digital economy is more advanced, where the positive impact of digital inclusion on rural household consumption is more pronounced.

The accelerated growth of the digital economy has resulted in substantial enhancements to the information infrastructure in rural regions. The expansion of network coverage has facilitated more convenient and efficient Internet access to local rural residents [45]. The development of the digital economy has optimized the allocation of resources, enabling rural residents to access a range of services, including e-commerce, online education, and telemedicine. This has also led to an increase in consumption choices and experiences. Furthermore, the digital economy has facilitated the transformation of rural households’ consumption patterns. The proliferation of novel financial instruments, including mobile payment, online lending, and digital insurance, has effectively alleviated financial constraints, stimulated new consumer demand, and promoted the upgrading of the consumption structure [46].

A more thorough investigation into the moderating effect of the digital economy on distinct categories of consumption reveals the outcomes for each category in columns (2) to (4) of Table 4. The data presented in the table indicate that the positive moderating effect of the digital economy on basic and enjoyment consumption is significant, while it is not significant for development consumption. The digital economy is reshaping the basic consumer market. E-commerce platforms have reduced the cost of goods’ circulation, and the increased penetration of mobile payments has created a virtuous cycle of “cost reduction–improved accessibility”. The establishment of intelligent logistics systems has improved distribution efficiency and increased price transparency, achieving a consumption upgrade characterized by “efficiency improvement–increased satisfaction”. This kind of Pareto improvement aligns with the rigid demand characteristics of essential goods, such as food and daily necessities, and has had a significant driving effect. However, the moderating effect on development-oriented consumption is not significant, revealing deep-seated contradictions in the current process of digital economy empowerment. From a supply-side perspective, the homogenization rate of paid knowledge products stands at 67%, while the digital transformation rate of high-quality educational resources remains below 30% (data from the 2023 Report on the Current State and Development Prospects of China’s Knowledge Payment Industry, iiMedia Research, 2023). From a demand-side viewpoint, the consumer trust index for virtual services (58.2) is considerably lower than that for physical goods (82.4) (data from the Research Report on Online Consumer Dispute Resolution Mechanisms, State Administration for Market Regulation, 2022). The digital economy has given rise to novel consumption scenarios and business models, thereby enhancing people’s quality of life and driving the growth of enjoyment-oriented consumption. The rapid development of live-streaming e-commerce has increased the conversion rate of impulse buying and brought emotional value to more consumers. VR/AR technology has introduced a new form of “experiential consumption” and provided a new vehicle for cultural and entertainment consumption. These innovations in consumption scenarios have promoted a shift in consumption concepts from functional satisfaction to emotional value recognition, forming a new path for consumption upgrades based on digital technology.

5.4. Heterogeneity Results and Analysis

The present study utilizes a regression analysis of the sample data, which have been categorized based on the total financial assets of the households under investigation. In accordance with existing studies, the median of the total household financial assets is used as a reference point, with low-asset households below the median [47].

As illustrated in

Table 5. Regressions grouped by total household financial assets.

Variables	Low-Asset Households (Less than 20,000 Yuan)				High-Asset Households (20,000 Yuan and Above)
	(1)	(2)	(3)	(4)	(1)	(2)	(3)	(4)
	Total Household Consumption Expenditure	Basic Consumption	Developmental Consumption	Enjoyable Consumption	Total Household Consumption Expenditure	Basic Consumption	Developmental Consumption	Enjoyable Consumption
DI	0.483 **	0.547 **	−0.035	0.848 **	0.494 **	0.467 **	0.151	0.876 **
	(3.799)	(4.244)	(−0.089)	(3.499)	(4.187)	(4.045)	(0.391)	(4.200)
Control variable	containment	containment	containment	containment	containment	containment	containment	containment
Constant	9.895 **	9.402 **	6.572 **	7.200 **	10.407 **	9.997 **	6.751 **	8.123 **
	(72.515)	(67.888)	(15.459)	(27.665)	(80.493)	(79.016)	(15.967)	(35.514)
Observations	1151	1151	1151	1151	953	953	953	953
R-squared	0.012	0.015	0.011	0.011	0.018	0.017	0.012	0.018

** p < 0.05.

, digital inclusion exerts a more pronounced influence on total consumption expenditure and basic consumption in the low household financial asset group. Conversely, its impact on enjoyment-oriented consumption is more substantial in the high household financial asset group. This discrepancy can be attributed, at least in part, to the constrained resources and limited disposable income characteristic of the low household financial asset group. Consequently, their consumption decisions are primarily driven by basic survival needs. Digital inclusion enhances the convenience of information access and service accessibility, thereby increasing the consumption expenditure of this group. By contrast, households with higher financial assets possess relatively abundant reserves and prioritize consumption upgrades and diverse choices. Digital inclusion assists these high-asset households in converting savings into immediate consumption by expanding consumption scenarios and enhancing payment convenience.

In order to conduct an in-depth study of the consumption expenditure of rural households in different regions affected by digital inclusion, this study analyzes regional heterogeneity based on the National Bureau of Statistics’ standard for dividing up the country into geographic regions.

As illustrated in

Table 6. Regional heterogeneity test.

Variables	Eastern Region				Central Region				Western Region
	(1)	(2)	(3)	(4)	(1)	(2)	(3)	(4)	(1)	(2)	(3)	(4)
	Total Household Consumption Expenditure	Basic Consumption	Developmental Consumption	Enjoyable Consumption	Total Household Consumption Expenditure	Basic Consumption	Developmental Consumption	Enjoyable Consumption	Total Household Consumption Expenditure	Basic Consumption	Developmental Consumption	Enjoyable Consumption
DI	0.557 **	0.572 **	−0.38	1.089 **	0.589 **	0.662 **	0.23	1.006 **	0.477 **	0.469 **	0.718	0.748 **
	(4.317)	(4.58)	(−0.827)	(4.075)	(2.867)	(3.218)	(0.396)	(2.742)	(3.099)	(2.984)	(1.691)	(2.833)
Control variable	containment	containment	containment	containment	containment	containment	containment	containment	containment	containment	containment	containment
Constant	10.093 **	9.644 **	6.831 **	7.422 **	9.979 **	9.451 **	6.374 **	7.463 **	10.127 **	9.720 **	6.306 **	7.688 **
	(71.176)	(70.239)	(13.518)	(25.26)	(44.939)	(42.462)	(10.169)	(18.822)	(61.362)	(57.673)	(13.87)	(27.168)
Observations	770	770	770	770	571	571	571	571	763	763	763	763
R-squared	0.024	0.027	0.001	0.021	0.014	0.018	0	0.013	0.012	0.012	0.004	0.01

** p < 0.05.

, the promotion effect of digital inclusion on total consumption exhibits a clear hierarchical structure, with central > east > west, and all are significant at the 5% level. Despite the development disparity between the central and eastern regions, the central region, exemplified by Henan and Hubei provinces, is undergoing a phase of rapid digital technology diffusion. The proliferation of digital tools has led to a substantial increase in consumption. According to Rogers’ innovation diffusion theory [48], central China is transitioning from early adopters to an early majority, with each increment in digital inclusion bringing an influx of new users into the digital consumption market. Despite advanced digital infrastructure in the eastern region, the upgrading of the consumption structure tends to stabilize, resulting in a slightly lower promotion effect compared to the central region. However, the western region faces challenges due to inadequate hardware facilities, particularly in provinces like Yunnan and Gansu, where network coverage and logistics access remain underdeveloped. According to the 2020 survey, there is a 23% disparity in the ownership rate of digital devices between western rural areas and eastern areas. The gap in digital skill proficiency is even more pronounced, reaching 37%. This indicates that western regions lack both “equipment” and “ability”. The combined effect of these factors has resulted in a suboptimal promotion effect of digital inclusion.

In the eastern and central regions, enjoyment-based consumption has emerged as the predominant catalyst for consumption upgrading, with coefficients of 1.089 and 1.006, respectively, both reaching statistical significance at the 5% level. This phenomenon can be attributed to the advanced level of digitization in these regions, which provides a robust foundation for the development of emerging consumption areas such as the cultural tourism industry and the smart home sector. Specifically, the high IoT penetration rate of smart homes and the well-developed logistics system in the east-central region have increased the demand for upgrading large-scale household goods, such as home appliances. The region’s abundant scenic spot resources and emphasis on digital transformation have also contributed to this trend, leading to the emergence of a novel consumption model termed “Cloud tourism+on-site clock out”. Concurrently, a live e-commerce campaign centered on Hangzhou, Zhejiang Province, has catalyzed the demand for new consumption areas such as cultural tourism and field carding. Furthermore, the live e-commerce activities in Hangzhou have contributed to the advancement of agricultural and tourism integration in the eastern and central regions. By contrast, developmental consumption in the western region confronts substantial challenges. The coefficient of digital inclusion on developmental consumption is 0.718, but it fails to meet the statistical significance threshold. This may be attributable to the mismatch between online educational programs and the linguistic diversity of the western region, characterized by a multitude of ethnic languages and a comparatively lower degree of Mandarin linguistic penetration compared to the central and eastern regions. Additionally, lower levels of healthcare access have resulted in rural households allocating a smaller proportion of their budgets to healthcare expenditures.

To mitigate the dependence on coefficients in traditional heterogeneity analysis, this study employs the Chow Test to rigorously assess whether structural differences exist in regression models across different regions.

The test results in

Table 7. Regional heterogeneity analysis—Chow Test.

Inter-Group Comparison Analysis	Statistics	Total Household Consumption Expenditure	Basic Consumption	Developmental Consumption	Enjoyable Consumption
East vs. Central	F (df1, df2)	1.155 (2, 1337)	1.827 (2, 1337)	0.994 (2, 1337)	0.133 (2, 1337)
	p	0.316	0.161	0.370	0.875
East vs. West	F (df1, df2)	0.681 (2, 1529)	0.397 (2, 1529)	11.324 (2, 1529)	1.021 (2, 1529)
	p	0.507	0.673	0.000 ***	0.360
Central vs. Western	F (df1, df2)	0.249 (2, 1330)	0.979 (2, 1330)	4.534 (2, 1330)	0.287 (2, 1330)
	p	0.780	0.376	0.011 **	0.751

*** p < 0.01; ** p < 0.05.

indicate that the differences in the total consumption expenditure, basic consumption, and enjoyment consumption across regions are not statistically significant. This suggests that the variations observed in these three types of consumption are primarily quantitative rather than structural. Such a phenomenon may be attributed to the commonalities in regional consumption promotion mechanisms, such as the widespread impact of e-commerce in rural areas. However, development-oriented consumption exhibits significant disparities between the eastern and western regions, as well as between the central and western regions. These differences may stem from the unique challenges faced by development-oriented consumption in the western regions, including linguistic and cultural barriers, and inadequate medical resources. By contrast, the eastern and central regions benefit from greater uniformity in language and more robust public resource allocation.

6. Conclusions and Policy Recommendations

6.1. Conclusions

This article employs a multivariate analysis to examine the relationship between digital inclusion as a conditional variable, total rural household consumption expenditure, and various dimensions of consumption expenditure as outcome variables. The objective is to identify the most effective strategies for enhancing rural household consumption expenditure. By investigating the factors and pathways influencing rural household consumption expenditure, the following research findings are presented:

First, “digital inclusion” has a richer connotation than “digital literacy”. This article delineates the distinction between digital literacy and digital inclusion from a subjective perspective. Digital literacy is an individual capacity, and its enhancement primarily hinges on the individual’s subjective commitment. However, digital inclusion involves multiple levels such as individuals, the environment, and society, and its improvement depends on the interaction of various factors such as individuals’ acceptance of digital technology, the digital development level of the environment, and the overall digital inclusion atmosphere of the society.

Second, the growth of rural household consumption expenditure is influenced by the digital inclusion of individuals, the environment, society, and the level of development of the regional digital economy. It can be observed that single factors such as age, gender, political position, health status, the highest degree, and marital status do not directly contribute to the observed increase in consumption expenditure. Consequently, the growth in rural household consumption expenditure is the consequence of a complex interplay of factors, reflecting the combined effect of multiple variables.

Third, two paths emerge for rural households’ consumption expenditure. Digital inclusion has been shown to reduce precautionary savings, increase income perception, and promote consumption growth. Digital inclusion is based on the level of development of the regional digital economy, which serves as a moderating variable. Both paths rely on the abundant information resources and opportunities brought about by digital inclusion and the popularization of digital products and services, as well as the development of sound infrastructure and the cultivation of digital skills.

Fourth, the process of digital inclusion in promoting the growth of rural household consumption expenditure is constrained by a number of practical factors. For instance, the digital literacy of rural residents must be enhanced, as many lack the requisite computer operation skills and knowledge of network applications. Furthermore, the infrastructure is not yet optimal, with significant discrepancies between network coverage, electricity supply, and other aspects compared to urban areas. The digital financial service system is not yet robust, with many rural regions lacking convenient digital financial services, which presents challenges for residents in making online payments and online lending. Additionally, a supportive environment for digital inclusion has yet to be established, and policy support and social attitudes in rural areas still require improvement.

6.2. Policy Recommendations

In order to comprehensively enhance digital inclusiveness in rural China, it is important to ensure that all rural residents have equitable and effective access to, use of, and benefit from digital technologies. This will promote increased levels of consumption in rural households, and ultimately contribute to the achievement of the ambitious goal of the comprehensive, coordinated, and sustainable development of the rural economy. It is recommended that concerted efforts be made at three levels—the individual, the environment, and society—in order to form a synergistic force.

First, the objective of this initiative is to establish a specialized digital literacy training system aimed at enhancing the digital competencies of rural residents. The training curriculum is meticulously structured to accommodate diverse proficiency levels. For the low-asset group, the primary focus is on training in basic payment and shopping skills. “Digital help groups” are established through collaboration with village “two committees”, mobilizing village party members and university students to provide voluntary assistance directly to villagers’ homes. For the high-asset group, the development of consumption upgrading courses is prioritized, including the use of digital currency and smart home technologies. Additionally, a digital competence certification mechanism has been instituted, incorporating digital skills training into the development plan for cultivating new vocational farmers. The “digital pass” certification, linked to credit lines and e-commerce platform benefits, has been implemented, forming a positive incentive cycle.

Second, digital infrastructure construction projects with precise coverage will be implemented to provide rural residents with a stable network consumption environment. This project will promote the creation of a dynamic monitoring system for the Digital Inclusion Index, and incorporate key indicators such as network stability and digital service penetration into the assessment system of local governments. The focus of this initiative is on addressing the problem of “signal islands” in remote areas in the west. Furthermore, the implementation of a “tower + photovoltaic” hybrid power supply model has been advocated for to reduce the operation and maintenance costs of base stations in complex terrain areas. Concurrently, a rural network operation and maintenance system has been established and perfected, and emerging technologies such as drone inspections have been utilized to ensure the stable operation of the network by carrying out regular network inspections and fault troubleshooting tasks. Third, a coordinated mechanism for digital inclusion policies should be constructed, and the social support system should be improved. The following measures should be taken: establish a “digital inclusion–financial innovation” policy laboratory. Develop and pilot-apply a digital credit assessment model. Incorporate digital skills and consumption data into the credit collection system of farmers. The development of an intelligent “consumption ability–financial product” matching system is also crucial, with the aim of providing farmers with targeted financial products and services. The implementation of the “Digital Inclusion Legislation and Guarantee Plan” is essential for clarifying the rights and responsibilities of the government, enterprises, and social organizations. The formulation of the “Minimum Guarantee Standards for Rural Digital Services” is also necessary, as is the establishment of a mandatory disclosure system for digital services. The regulation of the supply of rural digital services is also crucial.

Finally, the promotion effect of the digital economy must be deepened. To this end, a “county digital economy ecosystem” should be created, with small cuts made, e-commerce, logistics, and financial resources integrated, and townships serving as the basic unit. A consumption big data analysis platform should be established, supply and demand accurately connected, and the flow of resources reduced, thus improving efficiency and reducing costs. Innovative measures should be considered, such as the issuance of “digital consumption vouchers”, the employment of big data analysis to summarize the characteristics of the household consumption structure, and the targeting of the issuance of digital vouchers for developmental consumption, including, but not limited to, education and medical care. These measures are intended to stimulate the transformation and upgrading of consumption.

This paper contributes to the extant research on digital inclusion and rural household consumption by offering an in-depth discussion of the relationship between the two, verifying the relevant assumptions through empirical analysis, and providing a theoretical basis and policy recommendations for promoting the level of rural household consumption. However, the paper is not without its limitations. First, the study is based on the cross-section data of the CFPS project (2020), which are not very current and make it difficult to capture the feedback of dynamic changes due to the static model. Second, the study relies excessively on OLS regression models, which fail to adequately deal with nonlinear effects, and the robustness tests for extreme values and potential subgroup differences are inadequate. Additionally, the analysis of moderating effects is constrained to the aggregate level, without stratified tests on sub-dimensions such as the technology penetration, platform maturity, and policy support intensity of the digital economy, which results in an inadequate targeting of policy insights. In a subsequent study, we will integrate the multi-period CFPS panel data, update the data, and optimize the research methodology. Concurrently, we will conduct an in-depth analysis of the moderating mechanism and attempt to utilize Moderating Effect Heteroscedasticity Analysis (ME-HET) to test the marginal differences of the digital economy in different dimensions of the digital inclusion to promote the consumption of rural households.