Recently, the joint paper Growth with Improved Distribution: A New Framework for Testing the Common Prosperity Effects of Policies by Professor Zhang Zhengyu from the Econometrics Department of the School of Economics, Shanghai University of Finance and Economics, together with doctoral students Chen Haowen and Shao Lina, has been officially published in Economic Research Journal, the top Class A domestic economics journal in China.
Abstract
Common prosperity is an essential feature of Chinese‑style modernization. How to improve the welfare of low‑income groups while boosting economic growth stands as one of the core policy concerns at present. Focusing on the common prosperity effects of new infrastructure construction, this paper proposes a policy evaluation framework centered on the tail average treatment effect (TATE). The framework directly measures policy impacts on individuals at the tail of the income distribution, enabling joint testing of a policy’s growth and redistribution effects within a unified framework, and revealing potential paths for policy optimization. The results show that new infrastructure construction significantly raises residents’ overall income, and exerts an even stronger income‑boosting effect on low‑income groups, embodying its dual functions of driving economic development and improving income distribution. Tests by income source indicate that the income growth for low‑income populations and the narrowed income gap brought by new infrastructure are mainly realized through wage income. Counterfactual analysis further suggests that accelerating new infrastructure construction generates more robust income growth among low‑income groups in regions dominated by the real economy, which demonstrates the alignment between digital‑real economic integration and the goal of common prosperity. The TATE‑centered evaluation framework for common prosperity effects proposed in this paper represents an effort to develop policy evaluation econometrics with Chinese characteristics.
Zhang Zhengyu is Professor, Doctoral Supervisor and Chair of the Econometrics Department at the School of Economics, Shanghai University of Finance and Economics, and a Young Scholar of the National Talent Program of the Ministry of Education. His research focuses on causal inference econometrics. His research outputs have won the Third Prize for Outstanding Achievements in Humanities and Social Sciences of the Ministry of Education, the Multa Scripsit Award from Econometric Theory, the First Prize of Shanghai Philosophy and Social Sciences Outstanding Achievement Award, and the Excellent Paper Award of Management World for 2024, among other honors.
Chen Haowen is a combined master‑doctoral student admitted in 2021, majoring in econometrics at the School of Economics, Shanghai University of Finance and Economics, supervised by Professor Zhang Zhengyu. His main research interests include econometric theory and its applications, and socialist political economy with Chinese characteristics.
Shao Lina is a combined master‑doctoral student admitted in 2021, majoring in econometrics at the School of Economics, Shanghai University of Finance and Economics, supervised by Professor Zhang Zhengyu. Her main research interests are econometric theory and policy evaluation.
