Experimental Design
We added our experiment to an existing survey (OeNB Barometer) that is administered by IFES (https://www.ifes.at/), an independent commercial survey agency, for the Austrian National Bank (Oesterreichische Nationalbank, OeNB). IFES draws a random representative sample (N approx. 1,000) of Austrian adult (above 18 years of age) population from registry data (Melderegister). The annual survey is a repeated cross-section and is conducted as computer-assisted personal interviewing (CAPI). The main blocks of the survey concern broad economic topics, such as asset holdings, saving motives, inflation expectations, and trust in institutions. The field phase will start on May 23, 2022 and continue until approximately July 31, 2022. The survey will be in German only. Data will be made available to the researchers in August.
In the experiment, the participants will state their additional willingness to pay (in Euro) for a close contact service (haircut) for different scenarios under different conditions. We ask for three different scenarios: (i) the original virus of early 2020, (ii) the Omicron variant of winter 2021/2022 and (iii) a hypothetical new variant in the future. Before answering the questions for each scenario, we provide scenario cards for all respondents that remind them qualitatively in neutral language about the situation at that particular point in time (text see below, translated from German original).
For all three scenarios, we separate participants into four groups that are being constructed by two independent splits. The first random split where we separate between being tested for COVID-19 with an “Antigen-test” (70%, A) or an “Antigen-test and a PCR-test” (30%, B). The second random split is by vaccination status of the service provider where we separate between being vaccinated (50%, X) and not being vaccinated (50%, Y). As a result, the four groups should approximately have the following sizes: “AX” = 350, “AY” = 350, “BX” = 150, “BY” = 150.
For each scenario, all individuals are being asked for their additional (relative to price of haircut before the pandemic) willingness to pay for the haircut if (i) the service provider is wearing an FFP2 mask and (ii) the service provider is wearing an FFP2 mask and is tested for COVID-19 (according to treatment, “A” vs. “B”). For scenario two and three, the vaccination status (“X” vs. “Y”) applies to both questions (i) and (ii). For scenario one, we do not state the vaccination status. The respondents can report Euro values in integer steps.
We expect the following results:
• We expect no significant differences between the two testing treatments (“Antigen”, A vs. “Antigen + PCR”, B). The reason for this is that both test provide reliable results, when performed adequately. The treatment is mainly intended as a robustness check as the Austrian Covid-protection laws where switching between official acceptance of Antigen and PCR tests throughout the pandemic (also in the close service sector). Thus, for most parts of the analysis we pool those observations (after ensuring that there are no statistically significant differences).
• Ceteris paribus, a higher infection risk should thus increase willingness to pay for risk reduction.
• Ceteris paribus, a higher mortality, conditional in infection, should thus increase willingness to pay for risk reduction.
• Ceteris paribus, vaccination should increase the willingness to pay compared to unvaccinated.
• Within the vaccination treatment, the additional benefit from testing is lower, which should result in a smaller difference between wearing a FFP2 mask and being additionally tested within the vaccination treatment group.
For the experiment, we expect differential results, based on observed and unobserved characteristics. Thus, we will employ a heterogeneity analysis by either splitting the sample or controlling for characteristics.
Sample Slits / Dropping Observations (in some OLS regressions):
• Separating by/controlling for individuals who state positive willingness to pay (vs. negative values or zero)
• Separating by/controlling for sex, education, region, occupation, (household) income (all measured in the survey part)
• Separating by/controlling for risk attitude (as measured in the survey part, e.g. portfolio choice, nature of savings)
• Separating by/controlling for financial literacy, numeracy
• Separating by/controlling for forward looking behavior (as measured in the survey part, e.g. precautionary measures against climate change, inflation expectations along various horizons)
• Separating by/controlling for trust in institutions (as measured in the survey part) or traditional western medicine and pharmaceutical companies (measured after the participants finished the experiment in the survey)
• Separating by/controlling for vaccination status (as stated by participant, measured following the experiment in the survey; and instrumented/proxied using an instrumental/proxy variable approach)
Text scenario cards: (English transcript; participants receive these in German language only)
(i) Original virus of early 2020
• Think back to the first Corona wave of early 2020.
• At that time there is no vaccination against the Corona virus available.
• Uncertainty about potential long-term consequences as well as the mortality, in particular conditional on age and other unknown risk factors, is very high.
• The mortality rate, conditional infection, is considered very high at that moment.
• The number of cases is relatively small, but intensive care units at hospitals are reaching capacity limits due to the large share of severe cases.
(ii) Omicron variant of winter 2021/22
• Think back to the Omicron Corona wave of winter 2021/22.
• At that time there is a vaccination against the Corona virus available that reliably protects at risk people individuals from severe progression.
• The mortality rate, conditional infection, is very low for vaccinated individuals.
• The number of new infections is very high, but the share of severe progression is very low.
(iii) Hypothetical new variant in the future
• Now imagine the following hypothetical scenario.
• There is a new variant of the Corona virus against which the vaccination potentially may not work anymore.
• The mortality rate, conditional infection, is again at the level of the first Corona wave of early 2020.
• The infection rate is very high and at the level of the Omicron wave of winter 2021/22.