Personalized Response Scales in Inflation Expectations Surveys

Last registered on February 02, 2024
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Pre-Trial

Trial Information

General Information

Title
Personalized Response Scales in Inflation Expectations Surveys
RCT ID
AEARCTR-0012861
Initial registration date
January 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
January 19, 2024, 2:24 PM EST

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

Last updated
February 02, 2024, 4:18 AM EST

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

Locations

Country
Germany
Region
Country
United States of America
Region

Primary Investigator

Name
Thomas Eife
Affiliation
University of Heidelberg
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Other Primary Investigator(s)

PI Name
Christoph Becker
PI Affiliation
University of Heidelberg
Contact Investigator
PI Name
Peter Duersch
PI Affiliation
University of Mannheim
Contact Investigator

Additional Trial Information

Status
Completed
Start date
2024-01-19
End date
2024-01-26
Keywords
Behavior
Additional Keywords
inflation, response scale, density forecast, beliefs
JEL code(s)
C83, D84, E31
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Central banks regularly measure inflation expectations using density forecasts, in which respondents are asked to assign probabilities to pre-specified ranges of inflation. In previous experiments, we showed that such density forecasts are susceptible to changes in the scale and might not be well adapted to situations were the actual inflation rate changes substantially. Some of these problems can be remedied by shifting the scale of the density forecast by the point forecast of the survey participants. In the current study, we want to explore this further by providing completely personalized scale to the participants.
In the survey, participants are asked up to four questions on their inflation expectations. Three of these questions are similar to those used in the New York Fed’s SCE and ask about inflation expectations over the next 12 months: A binary question if inflation or deflation is more likely, a point forecast, and the aforementioned density forecast. Additionally, some participants are asked to also state their minimum and maximum inflation rate, which we elicit in different ways. This minimum and maximum is then used to construct a personalized scale for the density forecast which is takes the thus stated possible inflation ate into account. For some of the treatments the personalized scale is additionally centered around the previously stated point forecast.
External Link(s)

Registration Citation

Citation
Becker, Christoph, Peter Duersch and Thomas Eife. 2024. "Personalized Response Scales in Inflation Expectations Surveys." AEA RCT Registry. February 02. https://doi.org/10.1257/rct.12861-2.2
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention: Eliciting inflation density forecasts using personalized scales
Intervention (Hidden)
Intervention Start Date
2024-01-19
Intervention End Date
2024-01-26

Primary Outcomes

Primary Outcomes (end points)
(i) Individual estimate if 12 months from now the inflation rate will be positive or negative (deflation) [Q1]
(ii) Individual point forecast of the 12-month ahead inflation rate [Q2]
(iii) Individual minimum and maximum inflation rate/90 percent confidence interval of inflation rate over the next 12 months [Q3]
(iv) Individual density forecasts of the 12-month ahead inflation rate [Q4]
Primary Outcomes (explanation)
(i) Participants are asked to state whether they think inflation or deflation is more likely occur 12 months from now.
(ii) Participants are asked about a point estimation.
(iii) Participants state a minimum and maximum inflation rate estimate. This will be elicited as a minimum/maximum or as the lower/upper bound of a 90% confidence interval.
(iv) Participants distribute probabilities on a scale of possible inflation rates with 8. Probabilities need to add up to 100.

Secondary Outcomes

Secondary Outcomes (end points)
(i) Participants self-reported difficulty regarding their answers to [Q3, Q4].
(ii) Demographics (age, gender, education, US state of residence) [Questionnaire]
(iii) Financial literacy [Questionnaire]
(iv) Knowledge of inflation target [Questionnaire]
Secondary Outcomes (explanation)
(i) Ordinal measurement of difficulty (six-point Likert scale).
(ii) Answers will be used as control variables.
(iii) We use the three multiple-choice questions from Lusardi and Mitchell (2011).
(iv) Multiple-choice question that tests if participants know the inflation target of the Fed.

Experimental Design

Experimental Design
Participants in the survey will be asked whether they expect inflation or deflation 12 months from now [Q1] and then give their inflation expectations again in a point forecast [Q2]. Depending on the treatment, this is followed by eliciting their minimum and maximum expected inflation rate [Q3]. This is elicited either directly as the minimum/maximum or as the lower/upper bound of a 90% confidence interval. Additionally, we use three different representations of this questions: Open number boxes, two independently movable sliders, and a symmetric slider (where participants basically state a symmetric range around the point forecast). The last main question is a density forecast for the inflation 12 months from now [Q4]. Questions Q1, Q2 and Q4 similar to those in the New York SCE. Questions Q3 and Q4 are also followed by a difficulty question each, in which participants state how difficulty they perceived the preceding question on a six-item Likert scale. After this, the participants will answer a questionnaire including control and demographic questions [Questionnaire].
Participants will take part in one of twelve possible treatments:
1. Static (S): Uses a static scale for the density question, similar to the one used in the New York Fed’s SCE but with equal bin width.
2. CenterPersonalized8 (CP-8), CenterPersonalized4 (CP-4), CenterPersonalized2 (CP-2), CenterPersonalized1 (CP-1), and CenterPersonalized05 (CP-05): Uses a static scale for the density question, but shifted by the point forecast of the participant. The bin width varies and is 8, 4, 2, 1, or 0.5 percentage points depending on the treatment.
3. FullyPersonalizedBoxA (FPB-A): Asks about the minimum and maximum expected inflation rate using open number input fields. This information will be used to construct the scale for the density question [Q4].
4. FullyPersonalizedBoxB (FPB-B): Asks about the lower and upper bounds of the 90% confidence interval of the expected inflation rate using open number input fields. This information will be used to construct the scale for the density question [Q4].
5. FullyPersonalizedSliderA (FPS-A): Asks about the minimum and maximum expected inflation rate using two independently movable sliders. This information will be used to construct the scale for the density question [Q4].
6. FullyPersonalizedSliderB (FPS-B): Asks about the lower and upper bounds of the 90% confidence interval of the expected inflation rate using two independently movable sliders. This information will be used to construct the scale for the density question [Q4].
7. FullyPersonalizedSliderC (FPS-C): Asks about the minimum and maximum expected inflation rate using a slider that is centered on the point forecast. This slider allows to thus state a range for the minimum and maximum inflation rate around the point forecast. This information will be used to construct the scale for the density question [Q4].
8. FullyPersonalizedSliderD (FPS-D): Asks about the lower and upper bounds of the 90% confidence interval of the inflation rate using a slider that is centered on the point forecast. This slider allows to thus state a range for the minimum and maximum inflation rate around the point forecast. This information will be used to construct the scale for the density question [Q4].
Additionally, participants in the CenterPersonalized treatments are also asked one of the variants of the minimum/maximum questions of the FullyPersonalized treatments (including not being asked the question). For those participants, this information is however not used to construct the scale of the density question [Q4].
In order to recruit a representative sample of the US population, we run the survey on the online research platform Prolific. We recruit a sample of 1800 participants total, 150 per treatment. Participants will be assigned one of the twelve treatments iteratively when starting the study. This way, we make sure that any differences we obtain are not driven by timing but instead reflect a genuine effect of our treatment intervention. Participants will earn a fixed fee of £1 for their participation.
Experimental Design Details
Randomization Method
Randomization of treatments done by the experimental software.
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
1800 Prolific participants
Sample size: planned number of observations
1800 Prolific participants
Sample size (or number of clusters) by treatment arms
150 participants per treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering): Test if the mean between any two treatments differs. Test used is two-sample t-test, assuming equal variances in both treatment groups. For a group size of 150, power calculation (alpha = 0.05, beta = 0.8) informs us that the minimum detectable effect size would be a difference in means of 0.3245.
Supporting Documents and Materials

Documents

Document Name
Hypotheses
Document Type
other
Document Description
Main hypotheses to be tested.
File
Hypotheses

MD5: 113b7545115c1b591cc5b68dd319c294

SHA1: 1c313c2b13814469c9783a1010145351a91ae0f9

Uploaded At: January 19, 2024

Document Name
Instructions
Document Type
other
Document Description
Detailed instructions
File
Instructions

MD5: d809b0d40230d03333ae52e3a8683c2f

SHA1: 7e676ecc3b2c6a7c4816811bbe317d150ff8d956

Uploaded At: January 19, 2024

Document Name
IRB Approval
Document Type
other
Document Description
File
IRB Approval

MD5: b2055e9fbc7056bdc943a381c1c37662

SHA1: 34a007436ba9f765db7afca589e36f9210253042

Uploaded At: January 19, 2024

IRB

Institutional Review Boards (IRBs)

IRB Name
IRB of the Faculty of Economics and Social Sciences at Heidelberg University
IRB Approval Date
2023-12-19
IRB Approval Number
FESS-HD-2023-018
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
January 21, 2024, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
January 21, 2024, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
1,806 participants
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
1,806 participants
Final Sample Size (or Number of Clusters) by Treatment Arms
Baseline: 152, CenterPersonalized8 (CP-8): 153, CenterPersonalized4 (CP-4): 151, CenterPersonalized2 (CP-2): 147, CenterPersonalized1 (CP-1): 149, CenterPersonalized05 (CP-05): 149, FullyPersonalizedBoxA (FPB-A): 152, FullyPersonalizedBoxB (FPB-B): 153, FullyPersonalizedSliderA (FPS-A): 150, FullyPersonalizedSliderB (FPS-B): 146, FullyPersonalizedSliderC (FPS-C): 152, FullyPersonalizedSliderD (FPS-D): 152
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials