Luohan Academy

E-Commerce Connects the Countryside in China

The dramatic expansion of e-commerce is one of the most defining phenomena in the digital era, especially in urban areas.  Yet, access to e-commerce has also become the basis of development policy to improve the welfare of rural regions around the world.

By leveraging on a large-scale randomized controlled experiment (RCT) of introducing e-commerce access by building terminals and warehouses in rural villages to reduce logistical as well as transactional barriers, the authors Victor Couture, Benjamin Faber, Yizhen Gu, and Lizhi Liu evaluate the impact of access to e-commerce access for rural households in China in a working paper for National Bureau of Economic Research (NBER) Working Paper Series.

Unsurprisingly to us at Luohan Academy, the preliminary results show households that are actively participating in e-commerce indeed significantly reduced living costs from retail consumption. On average, families that partake in e-commerce in rural areas are wealthier and healthier.

This is the first and the only experimental evidence evaluating the influence of e-commerce on the rural economy, and the results clearly show the need for further research. We will stay tuned to this Working paper for updates and new analysis and urge you to do the same.


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