Bridging the Digital Divide: Internet Usage and Consumption Inequality Among Rural Residents

Within the strategic framework of building a domestic economic cycle, bridging the digital divide for rural residents to fully unleash their consumption potential has become a key focus for narrowing consumption gaps and revitalizing the domestic market. This paper utilizes data from the China Household Panel Survey (CHPS) from 2012 to 2020 to empirically examine the impact of internet usage on consumption inequality among rural residents through a multi-period difference-in-differences model. The findings reveal: First, while internet usage significantly boosts rural consumption, it also reduces consumption inequality in rural areas—specifically, it has a stronger consumption-promoting effect on low- and middle-income groups than on high-income groups. Second, mechanism analysis reveals two pathways: On one hand, internet usage significantly promotes consumption smoothing and reduces precautionary motives among low- and middle-income rural households, thereby enhancing their willingness to consume and narrowing the consumption gap with high-income groups. On the other hand, it substantially boosts capital accumulation and improves employment/entrepreneurship quality for these households, elevating their consumption capacity and further closing the consumption gap with high-income groups. Finally, heterogeneity analysis reveals that internet usage exerts a greater impact on stimulating development-oriented consumption and enjoyment-oriented consumption. The development of traditional transportation infrastructure, new digital infrastructure, and digital finance creates a more equitable consumption environment, effectively enhancing the capacity of internet usage to reduce consumption inequality.