Owner-occupied housing costs, policy communication, and inflation expectations

Last registered on May 29, 2024
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Pre-Trial

Trial Information

General Information

Title
Owner-occupied housing costs, policy communication, and inflation expectations
RCT ID
AEARCTR-0013671
Initial registration date
May 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
May 29, 2024, 1:40 PM EDT

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

Locations

Country
Germany
Region

Primary Investigator

Name
Zivile Zekaite
Affiliation
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Joris Wauters
PI Affiliation
PI Name
Garo Garabedian
PI Affiliation

Additional Trial Information

Status
Completed
Start date
2022-07-01
End date
2022-07-31
Keywords
Other
Additional Keywords
Owner-occupied housing costs, inflation measurement, inflation expectations, European Central Bank
JEL code(s)
Owner-occupied housing costs, in ation
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
The ECB plans to include owner-occupied housing (OOH) costs in its inflation measure. This paper analyses how household long-run expectations about euro area inflation, interest rates, and OOH inflation would react to this change. Using a survey experiment, we find significantly higher inflation expectations under the treatment where OOH costs are assumed to be fully included in the inflation measure. This
information effect is heterogeneous as, among others, homeowners and respondents with low trust in the ECB react more strongly. However,
additional information about past OOH inflation reverses this increase. Thus, communication strategy is important for stabilizing long-term inflation expectations.
External Link(s)

Registration Citation

Citation
Garabedian, Garo , Joris Wauters and Zivile Zekaite. 2024. "Owner-occupied housing costs, policy communication, and inflation expectations." AEA RCT Registry. May 29. https://doi.org/10.1257/rct.13671-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
We provide different types of information about the ECB mandate, the treatment of owner-occupied housing costs in euro area inflation measure as well as some information about past developments in OOH costs.
Intervention Start Date
2022-07-01
Intervention End Date
2022-07-31

Primary Outcomes

Primary Outcomes (end points)
Inflation expectations, OOH inflation expectations
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
the role of OOH inflation expectations in explaining treatment effects on overall consumer inflation expectations
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Our survey experiment divides the survey respondent sample randomly into four ‘treatment’ groups, labelled T1 to T4. Each group received a different information treatment before being asked to respond to our three questions on inflation, OOH inflation and interest rate expectations, which are the same for all respondents. We thus implement a ‘between-subjects’ survey design to compare the average responses across different treatment groups.
Experimental Design Details
Randomization Method
randomization done in office by a computer
Randomization Unit
survey respondent
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
4538 respondents
Sample size: planned number of observations
4538 respondents
Sample size (or number of clusters) by treatment arms
approximately 1135 per treatment group
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?
Yes
Intervention Completion Date
July 31, 2022, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
July 31, 2022, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
Was attrition correlated with treatment status?
Final Sample Size: Total Number of Observations
Final Sample Size (or Number of Clusters) by Treatment Arms
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Abstract
The ECB plans to include owner-occupied housing (OOH) costs in its inflation measure. This paper analyses how household long-run expectations about euro area inflation, interest rates, and OOH inflation would react to this change. Using a survey experiment, we find significantly higher inflation expectations under the treatment where OOH costs are assumed to be fully included in the inflation measure. This information effect is heterogeneous as, among others, homeowners and respondents with low trust in the ECB react more strongly. However, additional information about past OOH inflation reverses this increase. Thus, communication strategy is important for stabilizing long-term inflation
expectations.
Citation
Wauters, Joris and Zekaite, Z. and Garabedian, Garo, Owner-occupied Housing Costs, Policy Communication, and Inflation Expectations (April 10, 2024). Available at SSRN: https://ssrn.com/abstract=4810782 or http://dx.doi.org/10.2139/ssrn.4810782
URL
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4810782

Reports & Other Materials