The Effect of Inflation Uncertainty on Household Spending

Last registered on March 06, 2024
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Pre-Trial

Trial Information

General Information

Title
The Effect of Inflation Uncertainty on Household Spending
RCT ID
AEARCTR-0012949
Initial registration date
February 23, 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
March 06, 2024, 12:27 PM EST

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

Locations

Country
United Kingdom of Great Britain and Northern Ireland
Region

Primary Investigator

Name
Johannes Fischer
Affiliation
Bank of England
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Other Primary Investigator(s)

PI Name
Christoph Herler
PI Affiliation
Bank of England
Contact Investigator
PI Name
Philip Schnattinger
PI Affiliation
Bank of England
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Additional Trial Information

Status
In development
Start date
2024-03-05
End date
2024-03-26
Keywords
Behavior, Finance & Microfinance, Labor, Other
Additional Keywords
Inflation, Uncertainty, Household Spending, Household Finance
JEL code(s)
E21, E24, E31, E50
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
What are the effects of household uncertainty about inflation? We use a household survey where respondents living in the United Kingdom (UK) provide probabilistic inflation expectations to answer this question. We ask respondents to provide us with their prior expectation about inflation uncertainty. Next, we treat a random quarter of the respondents by providing information about inflation rates, inflation uncertainty, or both from the UK survey of professional forecasters. One quarter is the control group. We then ask respondents to update the probability with which they expect future realised inflation rates. Finally, we ask respondents outcome variables of interest such as their expected spending, expected income growth, and inflation expectations and probability of inflation rates in five years. Provided the treatment is effective in changing the households information set, these questions allow us to identify the effect of inflation rate expected by households, and inflation uncertainty, on precautionary savings, income growth expectations, and trust in long-run stable inflation outcomes.
External Link(s)

Registration Citation

Citation
Fischer, Johannes, Christoph Herler and Philip Schnattinger. 2024. "The Effect of Inflation Uncertainty on Household Spending." AEA RCT Registry. March 06. https://doi.org/10.1257/rct.12949-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
We provide information about the first and/or second moments of future inflation in the UK using the forecasts of professional forecasters.
Intervention Start Date
2024-03-05
Intervention End Date
2024-03-26

Primary Outcomes

Primary Outcomes (end points)
The effect of inflation uncertainty on household spending
Primary Outcomes (explanation)
Consumption response to uncertainty

Secondary Outcomes

Secondary Outcomes (end points)
The pass-through of inflation uncertainty to inflation expectations (and vice versa)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
1. Elicit prior beliefs about inflation expectations and the associated uncertainty
2. Assign groups into control group and 3 treatment groups
3. Treatment groups are provided with information from the survey of professional forecasters about average expected inflation and / or the range of expected inflation outcomes
4. Elicit posterior beliefs about inflation expectations and the associated uncertainty
5. Survey respondents' consumption plans
Experimental Design Details
Randomization Method
randomisation done in office by computer
Randomization Unit
individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
6000 survey respondents
Sample size: planned number of observations
6000 survey respondents
Sample size (or number of clusters) by treatment arms
1500 respondents by treatment arm
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