Experimental Design Details
Participants will be recruited to complete an online survey via Prolific. This study employs a between-subjects design with two conditions that manipulate perceptions of inflation. Participants are randomly assigned to read one of two narratives: (1) high inflation (describing high inflation over the past month), (2) neutral inflation (describing stable price changes). After exposure to the narrative, participants complete a manipulation check to verify comprehension, followed by measures assessing their economic perceptions and decision-making.
Individuals in the treatment group read the following narrative:
The following information summarizes recent national economic data from consumer price reports.
Over the past year, the cost of a typical basket of household items has increased. Prices for basic groceries have gone up: milk costs more than a year ago; eggs are more expensive, chicken costs more per pound, and bread prices have risen. Overall, the weekly cost of basic groceries for a family of four has increased from about $250 to about $300. Rent has also increased by a large amount compared to last year. Moreover, common services now cost more: electric bills are higher, internet and phone plans cost more, and healthcare expenses have increased.
Participants in the control group read the following narrative:
The following information summarizes recent national economic data from consumer price reports.
Over the past year, the cost of a typical basket of household items has increased. Prices for basic groceries have gone up: milk costs more than a year ago; eggs are more expensive, chicken costs more per pound, and bread prices have risen. Overall, the weekly cost of basic groceries for a family of four has increased from about $250 to about $300. Rent has also increased by a large amount compared to last year. Moreover, common services now cost more: electric bills are higher, internet and phone plans cost more, and healthcare expenses have increased.
Participants are then asked to perform an investment task given. They are presented with 20 pairs of investment options. Participants see the dollar amounts and probabilities for two possible gain outcomes for each prospect and are asked to select which prospect they prefer. The option pairs have the same mean and variance, but different values of skewness.
Our study includes additional questions related to risk aversion (following Eckel and Rojas 2010), financial literacy, and demographic characteristics such as age education, income, region of residence, employment status, marital status, gender identity, and race.