At the moment, there is no answer to this question. Nevertheless, there are more than a few theories going all over the Internet forums supporting each approach, but this have not been confirmed to be true.
Here is how Pokemon Go game seems to work so far:
- Catch so many Pokemon to get hold of stardust and candy, and to boost your trainer level
- Evolve and improve Pokemon to augment your trainer level and stare at gyms
- Catch more and better Pokemon with your higher trainer level, evolve and boost them more
- Get the old Pokemon transferred when required in order to clear space and get extra candy
- Clean and repeat the process.