Home Price Expectations and Spending: Evidence From a Field Experiment

Last registered on January 09, 2024
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Pre-Trial

Trial Information

General Information

Title
Home Price Expectations and Spending: Evidence From a Field Experiment
RCT ID
AEARCTR-0012790
Initial registration date
January 04, 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
January 09, 2024, 10:48 AM EST

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

Locations

Country
United States of America
Region

Primary Investigator

Name
Christopher Roth
Affiliation
University of Warwick
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Felix Chopra
PI Affiliation
PI Name
Johannes Wohlfart
PI Affiliation

Additional Trial Information

Status
Completed
Start date
2019-11-01
End date
2019-12-31
Keywords
Behavior
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial is based on or builds upon one or more prior RCTs.
Abstract
We conduct a field experiment with US households to study how expectations about long-run
home price growth shape spending decisions. In our survey, we exogenously vary these
expectations by providing households with different expert forecasts. Linking the survey
data with rich home-scanner data, we document that homeowners’ spending is inelastic to
home price expectations. By contrast, renters reduce their spending when expecting higher
home price growth. These findings reflect differences in the tendency to be a future net
buyer of housing across the two groups. Our study highlight consequences of asset price
growth for consumption inequality.
External Link(s)

Registration Citation

Citation
Chopra, Felix, Christopher Roth and Johannes Wohlfart. 2024. "Home Price Expectations and Spending: Evidence From a Field Experiment." AEA RCT Registry. January 09. https://doi.org/10.1257/rct.12790-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2019-11-01
Intervention End Date
2019-12-01

Primary Outcomes

Primary Outcomes (end points)
Log scanner expenditure
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
A random half of the respondents are assigned to the high
forecast treatment and receive the following message:

According to this expert forecast, the average annual growth rate of home prices
in the US over the next ten years will be 6 percent. In the case where home prices
increase by 6 percent in each of the next ten years, this would mean that a home
worth $100,000 today will be worth about $179,085 in ten years from now.

The other half of the respondents are assigned to the low forecast treatment and receive the
following alternative message:
According to this expert forecast, the average annual growth rate of home prices in
the US over the next ten years will be 1.5 percent. In the case where home prices
increase by 1.5 percent in each of the next ten years, this would mean that a home
worth $100,000 today will be worth about $116,054 in ten years from now
Experimental Design Details
Randomization Method
Randomization done in office
Randomization Unit
Individuals
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
2554
Sample size: planned number of observations
2554
Sample size (or number of clusters) by treatment arms
1277
1277
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