Can farmers increase their income by participating in e-commerce? Evidence from rural China

Mingyang YinXinru HanYan YanXiudong Wang^*

• Institute of Agricultural Economics and Development, Chinese Academy of Agricultural Sciences, Beijing, China

With the rise of the digital economy, e-commerce has become a significant driver of agricultural modernization, offering opportunities to increase farmers' income by expanding sales channels, reducing transaction costs, and enhancing product value. However, despite growing empirical research, disparities remain in the research findings, and the impact and mechanisms of farmers' involvement in e-commerce operations on their income require further investigation.This study utilizes the 2020 China Rural Revitalization Survey to both theoretically and empirically examine the impact of farmers' participation in e-commerce on their total household income, while also exploring the mechanisms driving this relationship.(1) The empirical results of the endogenous switching regression model show that farmers' participation in e-commerce operations can increase their income. This conclusion remains robust after applying winsorization, the instrumental variable approach, and core variable substitution.(2) Heterogeneity analysis reveals that, under the counterfactual hypothesis, if non-e-commerce households were to participate in e-commerce operations, their average treatment effect in the low-income group would be greater than that in the high-income group. That is, their increase in household income would be larger than that of the corresponding high-income group, suggesting that farmers' participation in e-commerce would reduce income disparities among farmers.(3) Mechanism analysis indicates that farmers' participation in e-commerce operations promotes income growth primarily through three channels: enhancing information acquisition capacity, promoting social participation, and saving operating costs. Discussion: Therefore, this study recommends that the government refine policymaking to facilitate the integration of small-scale agricultural operators into emerging e-commerce models and establish a robust institutional support system. Additionally, efforts should focus on optimizing the rural e-commerce environment, enhancing farmers' digital awareness and social participation efficiency, and supporting their engagement in e-commerce. Lastly, strengthening rural digital skills education, cultivating and retaining e-commerce talent, and fostering sustained income growth for farmers.