How Does the Green Transition Impact Inflation Expectations? The Role for Speed of Transition and Monetary and Fiscal Policies

Last registered on April 30, 2025

Pre-Trial

General Information

Title

RCT ID

AEARCTR-0015653

Initial registration date

April 27, 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

April 30, 2025, 1:05 PM EDT

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

Yuteng Zhang

Affiliation

University of Birmingham

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Pei Kuang

PI Affiliation

University of Macau

Contact Investigator

Additional Trial Information

Status

On going

Start date

2025-04-24

End date

2025-06-30

Keywords

Behavior, Environment & Energy

Additional Keywords

Inflation Expectations, Environmental Economics, Policy Communication, Macro survey, Randomized Controlled Trial

JEL code(s)

D83, E31, E52, E71, Q54, H23

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

The transition to a green economy, aligned with the UK's Net Zero by 2050 goals, will have profound and multifaceted impacts on inflation and public economic behavior. This research explores the dynamic interaction between green transition and inflation expectations, leveraging an online survey experiment conducted with a large representative sample of UK households. The study provides causal effect of green transition on household subjective inflation expectations as well as subsequent spending choices, shedding light on public sentiment and behavior responding to green transition and different macroeconomics policy.

External Link(s)

Registration Citation

Citation

Kuang, Pei and Yuteng Zhang. 2025. "How Does the Green Transition Impact Inflation Expectations? The Role for Speed of Transition and Monetary and Fiscal Policies." AEA RCT Registry. April 30. https://doi.org/10.1257/rct.15653-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Intervention (Hidden)

Intervention Start Date

2025-04-25

Intervention End Date

2025-04-27

Primary Outcomes

Primary Outcomes (end points)

Household expectations about UK’s inflation rate across different time zone

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

In the pre-treatment stage, we firstly elicit baseline beliefs regarding inflationary effects of the green transition such as overall impacts and volatility level across various time horizons. Then respondents are also asked about the perceived speed of green transition and likelihood of achieving the Net zero.

In the Next, we provide point and probabilistic forecasts of inflation rate in UK for next 12 months and next 5 and 10 years. Additionally, answer on environmental attitudes, climate concerns, and expectations for other macroeconomic variables, such as unemployment, interest rate and GDP, are collected too.

During the treatment phase, participants are randomly into several groups: no information (control group), accelerated transition, slow transition, central bank communication, carbon pricing(ETS) and green subsidies.

Participants in the accelerated and slowed green transition groups will be presented with exactly opposite news articles featuring expert commentary on the current progress of the green transition and predictions about its future completion. The central bank communication group will be informed that the Bank of England stick to the inflation target 2% while deal with the climate change issue. Green subsidies group will receive the news about the government grants and funding for green infrastructure investment. Carbon pricing group receive the information about the cap of ETS (Emission Trading System).

In the post-treatment stage, we elicit respondents' updated inflation expectations after receiving information treatment. Following by is one open-ended question and several mechanisms for inflation formation which are used to capture their underlying motivations and reasoning while making changes for their predictions. Additionally, participants’ subsequent spending chocies and behaviors are involved in the survey too. In the last, the survey ends with demographical information from all the participants.

Experimental Design Details

Randomization Method

Randomization by a computer

Randomization Unit

individual

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

n/a

Sample size: planned number of observations

approximately 2470.

Sample size (or number of clusters) by treatment arms

Control group: 411 respondents receive no extra information
Treatment group1: 411 respondents receive accelerated green transition information
Treatment group2: 411 individuals receive slow green transition information
Treatment group3: 411 individuals receive central bank communication information
Treatment group4: 411 individuals receive Emission Trading System information
Treatment group5: 411 individuals receive green subsidies information.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Supporting Documents and Materials

IRB