Which income comparisons matter to people, and how? Evidence from a large field experiment

Last registered on July 06, 2023
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Pre-Trial

Trial Information

General Information

Title
Which income comparisons matter to people, and how? Evidence from a large field experiment
RCT ID
AEARCTR-0011720
Initial registration date
July 04, 2023

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
July 06, 2023, 2:24 PM EDT

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

Last updated
July 06, 2023, 2:52 PM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
Finland
Region

Primary Investigator

Name
Xiaogeng Xu
Affiliation
Hanken School of Economics
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Satu Metsälampi
PI Affiliation
University of Turku
Contact Investigator
PI Name
Michael Kirchler
PI Affiliation
University of Innsbruck
Contact Investigator
PI Name
Kaisa Kotakorpi
PI Affiliation
Tampere University, and Finnish Centre of Excellence in Tax Systems Research
Contact Investigator
PI Name
Peter Hans Matthews
PI Affiliation
Middlebury College, Aalto School of Business, and Helsinki GSE
Contact Investigator
PI Name
Topi Miettinen
PI Affiliation
Hanken School of Economics and Helsinki GSE
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2021-05-01
End date
2021-07-31
Keywords
Behavior, Welfare
Additional Keywords
Relative position, individual welfare, fairness, comparison group, information provision
JEL code(s)
D63, D8, D91, I31
Secondary IDs
The Academy of Finland, project (grant no. 332550), Finnish Centre of Excellence in Tax Systems Research / Academy of Finland (grant no. 346250), the Austrian Science Fund (FWF, project SFB F6310), Finnish Cultural Foundation (grant no. 00210723) and the Yrjö Jahnsson Foundation (grant no. 20177011)
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Received wisdom holds that income rank matters for life satisfaction. In much of the literature, however, income comparisons are limited to the national population and evidence is correlational. In this paper, we investigate differences in the causal effects of rank information across reference groups. In a representative sample of mid-career Finns, we randomize individuals to receive personal rank information about educational, municipal, occupational, or age reference groups, and compare the effects, for a set of alternative welfare measures, to the standard national reference group and to a control group that receives no information. We also characterize the accuracy of rank beliefs across groups. Our data, which integrates experimental and register data, finds that rank information causes differences in satisfaction with disposable income, perceived fairness of own income, and wage satisfaction, but not life satisfaction. We also fi nd substantial variation in the effects across reference groups, with those for the national reference group both weak and insignifi cant.
External Link(s)

Registration Citation

Citation
Kirchler, Michael et al. 2023. "Which income comparisons matter to people, and how? Evidence from a large field experiment." AEA RCT Registry. July 06. https://doi.org/10.1257/rct.11720-1.1
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
The intervention is to inform participants of the study their income rank in a reference group, i.e., how much percentage of people earning less than a participant. The reference group of the information depends on the treatment: Educational, Occupational, Municipal, Age cohort, and National.
Intervention (Hidden)
Intervention Start Date
2021-05-01
Intervention End Date
2021-07-31

Primary Outcomes

Primary Outcomes (end points)
We are interested in the outcomes of individual well-being (satisfaction with income, wage, job, and life, and fairness of income). We are also interested in attitudes toward different societal and political issues (trust in public agencies, attitudes to tax and labor market policies and migration policies, etc.) and social capital (perceived equal opportunities in education and job, just world beliefs, etc.). In the paper "Which income comparisons matter to people, and how? Evidence from a large fi eld experiment," we focuses on the outcomes of individual well-being and reserve other outcomes to next papers.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The experimental design is a information provision protocol. We ran an online survey with representative sample of adult Finns at the age between 35 and 45 years old. The study was pre-registered before the data collection. In the survey, the participants were asked to assess their income ranks in each of five reference groups (Educational, Occupational, Municipal, Age cohort, National), then they were informed of their income rank in one reference group. The participants in Control group saw no information. In addition, we have treatment Choice where the participants were allowed to choose in which group that they would most like to see their income rank and they saw their rank in the chosen group. The rest of the survey for treatment Choice was the same as the other treatment groups with information. After the information, they asked questions regarding their individual well-being, just world beliefs, attitudes toward policies (redistribution, welfare, labor market, migration, etc.), attitudes toward societal issues, and real-stake tasks (how much of their earning to donate to charity and voluntary tax, and how much to purchase a lotto). In the end, they saw a summary of the survey including their payment (15 euro conditional completing the survey, 5 euro if correct assessment of income rank of a randomly chosen group).
Experimental Design Details
Randomization Method
The randomization to treatments was done by Statistics Finland, who were responsible for drawing the sample and sending invitations to the participants. The participants remain anonymous to the collaborators of the project.
Randomization Unit
Unit of randomization is individual.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
The planned number of participants (individuals) is 7065. We also invited some participants to the non-incentivized version of the survey, but the non-incentivized participants will not be included in our analyses. The planned number of non-incentivized participants is 352.
Sample size: planned number of observations
The planned number of participants (individuals) is 7065. We also invited some participants to the non-incentivized version of the survey, but the non-incentivized participants will not be included in our analyses. The planned number of non-incentivized participants is 352.
Sample size (or number of clusters) by treatment arms
The sample size is around 800 participants for each treatment.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
Research Ethics Committee at Hanken School of Economics
IRB Approval Date
2019-12-12
IRB Approval Number
121219
Analysis Plan

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Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
July 31, 2021, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
July 31, 2021, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
There are 6641 participants who started the survey and 6121 participants who finished the survey.
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
The number of observations is 6641 (survey starters) and 6121 (survey completers).
Final Sample Size (or Number of Clusters) by Treatment Arms
Survey starters: 821 Control, 801 Education, 796 Occupation, 814 Municipality, 800 Age, 770 National, and 1840 Choice. Survey completers: 766 Control, 745 Education, 729 Occupation, 726 Municipality, 742 Age, 723 National, and 1690 Choice.
Data Publication

Data Publication

Is public data available?
No

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Program Files

Program Files
No
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
Received wisdom holds that income rank matters for life satisfaction. In much of the literature, however, income comparisons are limited to the national population and evidence is correlational. In this paper, we investigate differences in the causal effects of rank information across reference groups. In a representative sample of mid-career Finns, we randomize individuals to receive personal rank information about educational, municipal, occupational, or age reference groups, and compare the effects, for a set of alternative welfare measures, to the standard national reference group and to a control group that receives no information. We also characterize the accuracy of rank beliefs across groups. Our data, which integrates experimental and register data, finds that rank information causes differences in satisfaction with disposable income, perceived fairness of own income, and wage satisfaction, but not life satisfaction. We also fi nd substantial variation in the effects across reference groups, with those for the national reference group both weak and insignifi cant.
Citation
Which income comparisons matter to people, and how? Evidence from a large field experiment Authors: Xiaogeng Xu, Satu Metsälampi, Michael Kirchler, Kaisa Kotakorpi, Peter Hans Matthews and Topi Miettinen Working paper
URL
https://www.helsinkigse.fi/discussion-papers/discussion-paper-9

Reports & Other Materials