Do We Need Another Expert? The Willingness to Pay for Economic Narratives

Economic Narratives are a way of explaining current economic phenomena. Typically provided by so-called "experts", these narratives can impact individuals’ expectations about the economy. What is unknown so far, however, is whether those narratives about the economy are also finding relevant demand in the population. In this paper, we provide novel evidence on the population’s willingness-to-pay for expert narratives about the macroeconomy. In a first step, we asked renowned economic experts from the United States about their narratives about a current economic phenomenon, the recent surge in the risk of a recession forecasted by the Federal Reserve. In a second step, we offer participants in a large-scale survey representative of the adult population in the United States the opportunity to obtain information from these experts. First, we measure an incentivized Willingness-to-Pay (WTP) for this information. Next, we study the determinants of this WTP for narratives, using both demographic heterogeneity as well as additional treatments shedding light on the motives for information acquisition.
Finally, we also show how acquired narratives shape the beliefs of respondents about future economic developments, their understanding of major drivers of recessions, and their individual spending intentions. Our study highlights the importance of narratives for individual economic decision-making and, based on their influence on the belief formation process, on the macroeconomic development more generally.