The role of power transmission infrastructure in income inequality: Fresh evidence from China*

Power infrastructure plays a critical role in poverty and economic growth, but its distributional effects remain actively debated, especially in developing countries. This paper empirically examines the effects of power transmission infrastructure on income inequality in China. We find that power transmission infrastructure has a significant income distribution effect. This paper also analyzes its impact mechanism and suggests that the distributional effects mainly work through improving agricultural productivity and rural residents' income. With further research, the empirical results show that the fruit of power transmission infrastructure development is unevenly distributed within different groups, and the income inequality within urban and rural sectors has become even worse. The distributional effects also differ across regions, and the power-importing areas benefit more than exporting regions. These findings suggest insightful references for developing countries' power infrastructure planning and construction strategy.