Household Responses to Fiscal News Shocks: Vignette Experiment

Last registered on February 05, 2025
View Trial History

Pre-Trial

Trial Information

General Information

Title
Household Responses to Fiscal News Shocks: Vignette Experiment
RCT ID
AEARCTR-0015317
Initial registration date
February 03, 2025

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
February 05, 2025, 8:55 AM EST

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

Locations

Country
Germany
Region
North Rhine-Westphalia

Primary Investigator

Name
Nils Blossey
Affiliation
University of Cologne
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Adrian Schröder
PI Affiliation
University of Münster
Contact Investigator

Additional Trial Information

Status
In development
Start date
2025-02-06
End date
2025-02-28
Keywords
Behavior
Additional Keywords
Government spending, fiscal policy, expectation formation, mental models, vignette experiment
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We use a factorial vignette experiment to analyze how U.S. households respond to expansionary government spending shocks. A nationally representative sample of 1,600 respondents is presented with two scenarios—a baseline and a shock scenario—in which prospective government spending is randomized along three key dimensions: size, duration, and composition. We then examine how expectations about fiscal policy affect household forecasts for key macroeconomic variables, including inflation, GDP growth, unemployment, and average income tax rates. To explore the mental models underpinning the transmission mechanisms of fiscal policy, we elicit open-ended explanations and allow respondents to state their agreement with established theoretical mechanisms linking fiscal shocks to macroeconomic outcomes. This allows us to determine whether households’ mental models align more with Keynesian or Ricardian models of fiscal policy.
External Link(s)

Registration Citation

Citation
Blossey, Nils and Adrian Schröder. 2025. "Household Responses to Fiscal News Shocks: Vignette Experiment." AEA RCT Registry. February 05. https://doi.org/10.1257/rct.15317-1.0
Sponsors & Partners

Sponsors

Experimental Details

Interventions

Intervention(s)
We first inform respondents about the typical growth rate of federal government spending in the United States and ask them to provide their expectations for four key macroeconomic outcomes—inflation, unemployment, GDP growth, and the average income tax rate—over the next 12 months. Each respondent is then presented with a vignette describing a hypothetical fiscal expansion, which is randomized along three dimensions: the size of the expansion, its duration (temporary or permanent), and its composition (general spending, military spending, or infrastructure).
Intervention (Hidden)
Size: We use three shock sizes, a 3% increase in government spending (small scenario), a 5% increase in government spending (medium scenario), and a 10% increase in government spending (large scenario).

Persistence: Shocks are either temporary or permanent. In case of temporary shocks, respondents are informed that the shock is reversed in coming years such that overall government spending over the five years ahead is not higher compared to the baseline scenario. In case of permanent shocks, respondents are informed that the level of government spending will permanently be higher compared to the baseline scenario.

Composition: We use three options for the composition of the shock. Either we do not give specific information about the composition, or we inform respondents that the additional government spending is completely allocated to military expenditures, or that the additional government spending is completely allocated to infrastructure investments.
Intervention Start Date
2025-02-06
Intervention End Date
2025-02-28

Primary Outcomes

Primary Outcomes (end points)
Household expectations: Inflation rate, growth rate of real GDP, unemployment rate, and the average income tax rate
Primary Outcomes (explanation)
We elicit quantitative expectations for each of our four outcomes.

Secondary Outcomes

Secondary Outcomes (end points)
Transmission mechanism of fiscal expansion
Secondary Outcomes (explanation)
We use an open-ended question and ask respondents to rank predefined statements about how an increase in government spending affects various economic outcomes.

Experimental Design

Experimental Design
Our experimental design is structured as follows: First, respondents receive information about the usual real growth rate of federal government spending. They are then asked to provide their expectations for four key macroeconomic outcomes—inflation, GDP growth, the unemployment rate, and the average income tax rate—over a twelve-month horizon under this baseline scenario. Next, each respondent is assigned to a shock scenario, which consists of a randomized combination of the size, timing, and composition of a fiscal expansion. Finally, based on this shock scenario, respondents once again predict the evolution of each macroeconomic outcome.
Experimental Design Details
Randomization Method
Randomization is done by the computer.
Randomization Unit
Individual.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
1600
Sample size: planned number of observations
1600
Sample size (or number of clusters) by treatment arms
Vignette experiment with 3 dimensions and 18 possible combinations; N=88/89 per combination.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials

There is information in this trial unavailable to the public. Use the button below to request access.

Request Information
IRB

Institutional Review Boards (IRBs)

IRB Name
Gesellschaft für Experimentelle Wirtschaftsforschung IRB
IRB Approval Date
2024-11-04
IRB Approval Number
BMSmJoeL
Analysis Plan

Analysis Plan Documents

Analysis Plan

MD5: 34d3e17b52247834b0a218ce249026d3

SHA1: 125c9c336e33b323b94371e3de9a41cd87749861

Uploaded At: February 03, 2025

Post-Trial

Post Trial Information

Study Withdrawal

There is information in this trial unavailable to the public. Use the button below to request access.

Request Information

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