Interest rate perception

Last registered on November 19, 2024
View Trial History

Pre-Trial

Trial Information

General Information

Title
Interest rate perception
RCT ID
AEARCTR-0010316
Initial registration date
November 19, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
November 19, 2024, 4:43 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
China
Region

Primary Investigator

Name
Tianyu Han
Affiliation
UC Berkeley
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Other Primary Investigator(s)

PI Name
Xiao Yin
PI Affiliation
UCL
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Additional Trial Information

Status
Completed
Start date
2020-11-30
End date
2021-09-30
Keywords
Finance & Microfinance
Additional Keywords
JEL code(s)
E21, G40, G51, G53, M37.
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We designed an information treatment to generate shocks in consumers' interest rate perceptions.
External Link(s)

Registration Citation

Citation
Han, Tianyu and Xiao Yin. 2024. "Interest rate perception." AEA RCT Registry. November 19. https://doi.org/10.1257/rct.10316-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
We delivered the information treatment on a new page to a random 40% of those who paid interest costs on credit cards in 2020 before the experiment: The annualized interest rate on credit cards is around X1%. This rate is equivalent to a monthly interest rate of about
X2%. If you carry over ¥8,000 of debt on a credit card to the next billing cycle, then there will be around ¥X3 in interest rate in the next month.
Intervention (Hidden)
Intervention Start Date
2020-11-30
Intervention End Date
2020-12-01

Primary Outcomes

Primary Outcomes (end points)
Interest rate misperceptions
Primary Outcomes (explanation)
We measure how perceived interest rate and then credit card borrowing change after the information treatment

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The use of credit cards is one important channel for residents to make daily spending. To better understand the impact of credit cards on people’s livelihood, we randomly selected a certain number of active users of our bank’s credit cards to send out surveys. We hope to use this survey to study the spending and preferences of Chinese residents generally. Therefore, we will only focus on highly summarized
information for scientific research purposes, such as the average value and so on. We will not disclose the personal information of the participants in any respect. We will not, to any extent, change the types of financial products we provide, including credit scores, credit limits, deposit rates, etc., based on the participants’ personal answers.
1. How much in total did you spend last month using a credit card in our bank?
2. Suppose your billing cycle is at the end of the month. For each of the following scenarios, please select the closest amount of interest that would incur at the end of next month.
(a) You spend ¥5,000 this month and repay ¥3,000 at the end of this month
i. 0
ii. 10
iii. 20
iv. 30
v. 40
vi. 50
vii. 60
(b) You spend ¥5,000 this month and repay ¥1,000 at the end of this month
i. 0
ii. 20
iii. 40
iv. 60
v. 80
vi. 100
vii. 120
(c) You spend ¥5,000 this month and repay ¥0 at the end of this month
i. 45
ii. 55
iii. 65
iv. 75
v. 85
vi. 95
vii. 105
3. Suppose your total savings are ¥10,000. How much interest will you earn in the next month?
(a) 0
(b) 10
(c) 20
(d) 30
(e) 40
(f) 50
(g) 60
4. How many times did you pay interest on credit cards in the last year?
(a) 0
(b) 1-3
(c) 4-6
(d) 7-9
(e) more than 9 times.
5. The bank assigns each customer a credit score to label the relative safeness for granting a loan. What would be the credit score you believe you have at the bank? (Please give a number between 0 and 10, 10 being the safest).

Information treatment: The annualized interest rate on credit cards is around X1%. This rate is equivalent to a monthly interest rate of about
X2%. If you carry over ¥8,000 of debt on a credit card to the next billing cycle, then there will be around ¥X3 in interest rate in the next month.
6. Suppose your billing cycle is at the end of the month. If you spend ¥6,000 this month and repay ¥3,000 at the end of this month. How much interest in total would you incur at the end of the next month?
(a) 15
(b) 25
(c) 35
(d) 45
(e) 55
(f) 65
(g) 75
Experimental Design Details
Randomization Method
Randomization done in office by a computer
Randomization Unit
Individual credit card users
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
2000 credit card users
Sample size: planned number of observations
2000 credit card users
Sample size (or number of clusters) by treatment arms
800 treated consumers, 1200 control consumers
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials