Impact of rural households' digital ability on their production efficiency in China

Abstract

Rural digitalization has become a key part of modernization in China. However, this rural digitalization follows a top‐down approach, from government guidance to private construction. Rural households' digital abilities have not received sufficient attention. This study explores rural households' digital abilities and their impact on production efficiency. One thousand eight hundred and seventy households are grouped into digital households (who have access to both digital and traditional channels) and traditional households (who only access traditional channels) based on their access to information channels for comparative analysis. The two‐parameter item response theory is applied to measure digital ability; stochastic frontier models are constructed to test the impact of digital ability on production efficiency; and a stochastic meta‐frontier approach is used to compare the efficiency between groups. The results indicate that: (1) digital households have stronger digital abilities than traditional households. (2) Digital ability is positively correlated with production efficiency. This effect is most evident among traditional households, followed by social households (digital households who use more social channels than nonsocial channels), and finally, nonsocial households (digital households who use more nonsocial channels). (3) Human capital (education, health, and skills) of laborers, off‐farm work, and village internet infrastructure all promote efficiency significantly. Research findings can help policymakers formulate targeted interventions to improve rural households' livelihoods.

Digital Ability and Livelihood Diversification in Rural China

“…Having multiple sources of income and engaging in different types of work can contribute to higher earnings and overall financial well-being for rural households. When comparing households with the same types of work, it is observed that the high-ability group tends to have higher incomes than the low-ability group, which is consistent with an empirical study [29]. This observation highlights the role of digital ability in promoting the income of rural households.…”

“…This method is used to determine latent traits that are difficult to directly measure, such as cognitive abilities, personality traits, and attitudes. In agricultural economics, IRT is used to measure the information acquisition ability [28] or digital ability [25,29] of rural households. In the IRT strategy, respondents are asked to answer a set of binary questions of varying difficulty and discrimination, and their probability of success on this set of questions is positively correlated with their ability.…”

“…In our study, this set of questions is "whether to access a certain digital channel", which is defined as 1 if yes and 0 if no. According to the previous literature [25,29], digital channels included WeChat, short video platforms, web pages, professional applications, internet forums, and government platforms. A two-parameter IRT model was established for estimation [30]:…”