The 27th Academic Luncheon of the Digital Technology and Finance

Abstract：

Using iterative experiments to uncover causal links between critical policy details and outcomes helps to optimize policy design. This paper studies a large-scale staged fiscal stimulus program conducted during the COVID-19 pandemic, in which a provincial government in China disbursed digital coupons to 8.4 million individual accounts in consecutive waves and updated the program design each time. We find that ruling out unproductive program features leads to a pattern of increasing treatment effects over the waves and that program design matters more than the size of the fiscal stimulus in boosting spending. Our results show that (i) general coupons with no constraints on where the vouchers can be redeemed are more effective than specialized coupons in stimulating consumption in the targeted sectors; (ii) coupon packets with fewer denominations and shorter redemption windows tend to be more effective; and (iii) low-income residents and non-local residents are equally or even more responsive to the coupon program than other groups. Our results illustrate that generating variations in iterative policy experiments, combined with a timely assessment of individuals’ responses to marginal incentives, optimizes program design.

Speaker Introduction：

Tenghui Wang holds a Ph.D. in Finance from the Guanghua School of Management, Peking University and is currently a Postdoctoral Researcher at the University of Hong Kong. Her primary research interests lie in empirical corporate finance, development economics, and ESG (Environmental, Social, and Governance). She has published academic papers in esteemed journals such as Management Science, Accounting and Business Research, and the Journal of Finance Quarterly. Additionally, Dr. Wang has participated in various policy pilot studies, including research on China's consumption vouchers and housing provident fund reforms. Her academic achievements have been selected for presentation at international finance conferences including FMA (Financial Management Association), AsianFA (Asian Finance Association), and CFRIC (China Finance Review International Conference).