Digital transformation and household energy consumption: Evidence from the “Broadband China” policy

Abstract

Digital transformation has the potential to significantly impact household energy consumption (HEC) by promoting the adoption of energy-efficient technologies. This paper utilizes the time-varying Difference-in-Differences (DID) model to evaluate the causal effect of digital transformation on HEC within China's households. We find that HEC is positively impacted by digital transformation, as embodied by the "Broadband China" strategy; and the results remain reliable when many robustness tests are taken into account. Specifically, digital transformation has the potential to indirectly increase HEC by consumption upgrade and internet development mechanisms. The heterogeneity analysis reveals that the impact of digital transformation on HEC varies significantly across different household and regional. High-income, low skilled, rural areas, as well as households in areas with higher levels of development and marketization, are more likely to be affected by the digital revolution in production and consumption, which will inevitably lead to an increase in HEC. These insights are crucial for developing effective strategies to reduce HEC and promote sustainable development.