Risk Exposure and Acquisition of Macroeconomic Information

Last registered on October 13, 2020

Pre-Trial

Trial Information

General Information

Title
Risk Exposure and Acquisition of Macroeconomic Information
RCT ID
AEARCTR-0006580
Initial registration date
October 11, 2020

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
October 13, 2020, 9:13 AM EDT

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

Locations

Region

Primary Investigator

Affiliation
University of Warwick

Other Primary Investigator(s)

PI Affiliation
PI Affiliation

Additional Trial Information

Status
Completed
Start date
2019-09-10
End date
2019-09-17
Secondary IDs
Abstract
We conduct an experiment with a representative sample from the US to study households’ demand for macroeconomic information. Respondents who learn of a higher personal exposure to unemployment risk during recessions increase their demand for an expert forecast about the likelihood of a recession. Our findings are consistent with the basic premise of theories of rational inattention that demand for information depends on its expected benefit. Moreover, the fact that perceived risk exposure responds to information highlights frictions in households’ knowledge about the personal relevance of particular pieces of information. Our findings inform the modeling of information frictions in macroeconomics.
External Link(s)

Registration Citation

Citation
Roth, Christopher, Sonja Settele and Johannes Wohlfart. 2020. "Risk Exposure and Acquisition of Macroeconomic Information." AEA RCT Registry. October 13. https://doi.org/10.1257/rct.6580
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2019-09-11
Intervention End Date
2019-09-16

Primary Outcomes

Primary Outcomes (end points)
Demand for recession forecast.
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
The experiment proceeds as follows: First we measure respondents’ beliefs about the effect of the Great Recession in 2008-9 on the unemployment rate among people with similar characteristics as themselves. We then generate exogenous variation in perceptions
of exposure to macroeconomic risk by providing the respondents with data on actual changes in the unemployment rate among people similar to them over the Great Recession. Respondents are randomly assigned to receive information based on
data from either the American Community Survey (ACS) or the Current Population Survey (CPS). We exploit differences across the two Census surveys due to sampling variation and procedural differences as a source of exogenous variation in the provided
information. Thereafter, we elicit the respondents’ perceptions of how exposed they personally are to unemployment risk during recessions. Finally, respondents have to choose between receiving an expert forecast about the likelihood of a recession, a forecast about inflation, a forecast about the return on government bonds, a forecast about government spending, or no forecast.
Experimental Design Details
Randomization Method
Randomization done in office by a computer
Randomization Unit
Individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
1008
Sample size: planned number of observations
1008
Sample size (or number of clusters) by treatment arms
504 ACS treatment arm
504 CPS treatment arm
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number

Post-Trial

Post Trial Information

Study Withdrawal

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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