The Impact of Digital Infrastructure Construction on Urban–Rural Consumption Inequality in China: Evidence from Difference-in-Differences and Double Machine Learning

Yi Luo, Duxuan Zeng, Jian Zhu, Min Chen

Bridging urban–rural consumption inequality (URCI) is crucial for achieving sustainable and inclusive development. Although the welfare implications of digital infrastructure construction (DIC) have attracted increasing attention, evidence on its effect on URCI remains limited. This study exploits the staggered rollout of the “Broadband China” strategy as a quasi-natural experiment and estimates the effect of DIC on URCI using a city-level panel of 277 prefecture-level and above cities in China from 2012 to 2023. The empirical analysis combines a two-way fixed effects DID frame-work with double machine learning and a series of robustness checks. The results show (a) that DIC significantly reduces URCI, suggesting that digital infrastructure contributes to urban–rural consumption convergence; (b) mechanism analysis provides suggestive evidence consistent with two potential mechanisms: industrial structural transformation, reflected in industrial upgrading and industrial rationalization, and consumption scenario innovation, proxied by the expansion of digitally enabled consumption environments. Nonparametric bootstrap evidence further supports the presence of indirect associations through these mechanisms; (c) heterogeneity analysis shows that the mitigating effect of DIC is more pronounced in the central region, in cities with lower levels of economic development, and in cities with weaker innovation capacity, suggesting higher marginal returns to digital infrastructure in areas with less developed digital and consumption ecosystems. These findings highlight the inclusive role of digital infrastructure in reducing consumption inequality and provide policy-relevant evidence for promoting balanced urban–rural development in China and other developing economies pursuing digital infrastructure expansion.