CONTAINING THE VIRUS OR REVIVING THE ECONOMY? EVIDENCE FROM INDIVIDUAL EXPECTATIONS DURING THE COVID-19 EPIDEMIC
Last registered on March 31, 2020

Pre-Trial

Trial Information
General Information
Title
CONTAINING THE VIRUS OR REVIVING THE ECONOMY? EVIDENCE FROM INDIVIDUAL EXPECTATIONS DURING THE COVID-19 EPIDEMIC
RCT ID
AEARCTR-0005618
Initial registration date
March 30, 2020
Last updated
March 31, 2020 11:48 PM EDT
Location(s)
Region
Primary Investigator
Affiliation
National University of Singapore
Other Primary Investigator(s)
PI Affiliation
Tsinghua University
PI Affiliation
Nanyang Technological University
PI Affiliation
Tsinghua University
Additional Trial Information
Status
Completed
Start date
2020-02-29
End date
2020-03-20
Secondary IDs
Abstract
How does an epidemic affect individuals’ expectations on economic prospects? Do people care more about containing the disease or maintaining sustaining normal economic activities during the epidemic? We implement an incentivized longitudinal online survey on economic expectations with randomized controlled trials during the COVID-19 epidemic in China to answer these questions. Conditioning on individual fixed effects, we find that lower number of confirmed COVID-19 cases in a city significantly increases individual’s expectation on GDP growth rate. However, individuals’ perceptions on the level of economic recovery are not correlated with their expectations on GDP growth. Moreover, individuals do not update their expectations when information on work resumption rate is provided in a randomized controlled trial. Our finding conveys the message to policy makers that, during an epidemic, containing the spread of the disease should be prioritized than resuming economic activities, at least from the perspective of maintaining positive economic expectations among individuals.
External Link(s)
Registration Citation
Citation
Li, Keyang et al. 2020. "CONTAINING THE VIRUS OR REVIVING THE ECONOMY? EVIDENCE FROM INDIVIDUAL EXPECTATIONS DURING THE COVID-19 EPIDEMIC." AEA RCT Registry. March 31. https://doi.org/10.1257/rct.5618-1.1.
Experimental Details
Interventions
Intervention(s)
Intervention Start Date
2020-03-18
Intervention End Date
2020-03-20
Primary Outcomes
Primary Outcomes (end points)
In this RCT, we study the impact of economic recovery during the COVID-19 epidemic on individuals’ economic expectations. We implement a randomized controlled trial with information treatment in the third wave of the survey (after two waves of baseline surveys). More specifically, after eliciting respondents’ pre-treatment economic expectations and perceived work resumption rate, we randomly divide the respondents into five groups. In the baseline group (T0), we provide the current level of work resumption rate in China measured by the AI experts at Tsinghua University. In the other four treatment groups, we provide additional information on the work resumption rate in some selected cities, including the major city with the highest (T1) and lowest (T2) levels of work resumption rate, Beijing (T3), and the provincial capital of the individual’s residing province (T4). After the information treatment, we ask the respondents to revise their economic expectations. We aim to understand whether individuals revise their economic expectations according to the perception gap of the economic recovery level, and whether the way that the information is presented would affect their revision of economic expectation.
Primary Outcomes (explanation)
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
In this study, we analyze individuals’ economic expectations during the COVID-19 epidemic in China using an online longitudinal survey of approximately 1,900 individuals from seven provinces in China conducted from late February to mid-March of 2020. In each wave, we ask incentivized questions regarding respondents’ expectations on GDP growth rate in the first quarter of 2020, the period that Chinese economy was heavily affected by the COVID-19 epidemic, as well as their expectations on a few other economic indicators.
We carry out the research in two stages using both quasi-natural experiment and randomized controlled trials (RCTs). In the first stage of the analysis, we study the impact of the severity of COVID-19 epidemic on individual’s economic expectations. Specifically, we match individual’s revision of economic expectation between two waves with the number of COVID-19 new cases in the city that he/she lives in. Given that we conduct three waves of survey on the same respondents, we can measure each respondent’s revision on economic expectation twice. Using an individual fixed effect model, we can then study the causal impact of the number of COVID-19 new cases at the city level on individual’s revision of economic expectation, assuming that the number of COVID-19 new cases between the two waves (approximately 6-7 days) in a city is an exogenous information shock to individuals.
In the second stage of the analysis, we study the impact of economic recovery during the COVID-19 epidemic on individuals’ economic expectations from two perspectives. First, we elicit respondents’ belief on the current level of economic recovery in China, measured as a percentage compared to the normal level of economic activities (i.e., the so-called work resumption rate in China), and examine whether respondents’ perceived work resumption rate would affect their economic expectations based on an individual fixed effect model. Second, we implement a randomized controlled trial with information treatment in the third wave of the survey. More specifically, after eliciting respondents’ pre-treatment economic expectations and perceived work resumption rate, we randomly divide the respondents into five groups. In the baseline group (T0), we provide the current level of work resumption rate in China measured by the AI experts at Tsinghua University. In the other four treatment groups, we provide additional information on the work resumption rate in some selected cities, including the major city with the highest (T1) and lowest (T2) levels of work resumption rate, Beijing (T3), and the provincial capital of the individual’s residing province (T4). After the information treatment, we ask the respondents to revise their economic expectations. We aim to understand whether individuals revise their economic expectations according to the perception gap of the economic recovery level, and whether the way that the information is presented would affect their revision of economic expectation.
Experimental Design Details
Randomization Method
randomization done using randomly generated numbers in the computer.
Randomization Unit
individual
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
1284 individuals
Sample size: planned number of observations
1575 individuals
Sample size (or number of clusters) by treatment arms
315 individuals in T0 group, 315 individuals in T1, 315 individuals in T2, 315 individuals in T3 and 315 individuals in T4.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Tsinghua University
IRB Approval Date
2020-04-01
IRB Approval Number
2020-DCE-001
Post-Trial
Post Trial Information
Study Withdrawal
Intervention
Is the intervention completed?
No
Is data collection complete?
Data Publication
Data Publication
Is public data available?
No
Program Files
Program Files
Reports and Papers
Preliminary Reports
Relevant Papers