Tax Policy and Public Macroeconomic Expectations: Experimental Evidence from the UK

Last registered on March 18, 2025
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Pre-Trial

Trial Information

General Information

Title
Tax Policy and Public Macroeconomic Expectations: Experimental Evidence from the UK
RCT ID
AEARCTR-0015395
Initial registration date
February 16, 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 20, 2025, 5:59 AM EST

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

Last updated
March 18, 2025, 7:24 AM EDT

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

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Primary Investigator

Name
Yuying Wu
Affiliation
UNIVERSITY OF BIRMINGHAM
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Other Primary Investigator(s)

PI Name
Pei Kuang
PI Affiliation
University of Macau
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PI Name
Kaushik Mitra
PI Affiliation
University of Birmingham
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Additional Trial Information

Status
In development
Start date
2025-03-01
End date
2025-09-01
Keywords
Behavior
Additional Keywords
Belief formation, macroeconomic expectations, tax policy
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Economic theory suggests that fiscal policy shapes public expectations by influencing perceptions of future economic conditions. This study employs a randomized survey experiment to examine how individuals adjust their macroeconomic expectations in response to tax policy changes. How do variations in tax magnitude, policy justification, and announcement timing affect belief formation? Do different income groups respond differently to tax increases in forming expectations? By exploring these mechanisms, the study provides insights into how policy establishment and communication influence economic sentiment and forward-looking decision-making.
External Link(s)

Registration Citation

Citation
Kuang, Pei, Kaushik Mitra and Yuying Wu. 2025. "Tax Policy and Public Macroeconomic Expectations: Experimental Evidence from the UK." AEA RCT Registry. March 18. https://doi.org/10.1257/rct.15395-2.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2025-03-17
Intervention End Date
2025-04-04

Primary Outcomes

Primary Outcomes (end points)
The macroeconomic expectations of the UK public, including expectations of inflation, bank rates, GDP growth, the debt-to-GDP ratio, and the fiscal deficit.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
This study investigates how tax policy changes influence public expectations of macroeconomic indicators using a structured survey and a randomized experimental design.
First, participants answer a series of questions to elicit their prior expectations about macroeconomic conditions.
Next, participants are randomly assigned to different groups. Except for the control group, each group is exposed to distinct policy scenarios regarding an announced tax rate increase. Some receive information about the tax policy change with varying magnitudes, while others are provided with additional contextual details, such as the purpose of the tax increase.
Following the information intervention, participants update their forecasts for macroeconomic indicators and answer additional questions related to taxation. They are also asked to explain their reasoning, helping to analyze the mechanisms through which tax policy changes shape public expectations. In addition, participants report expected changes in their savings and consumption behaviors, allowing us to examine the broader economic implications of tax policy adjustments.
Experimental Design Details
Not available
Randomization Method
Randomization will be conducted by a computer algorithm.
Randomization Unit
individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
individual
Sample size: planned number of observations
Approximately 3,200–4,000 respondents in total.
Sample size (or number of clusters) by treatment arms
Control group: 800-1,000 respondents
Treatment group 1: 800-1,000 respondents
Treatment group 2: 800-1,000 respondents
Treatment group 3: 800-1,000 respondents
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
University of Birmingham’s research ethics team
IRB Approval Date
2024-08-01
IRB Approval Number
ERN_2753-Aug2024
Analysis Plan