Changing a single word in a survey can flip the result of whether the public is 'frugal' or 'living paycheck-to-paycheck.'
Economists use 'Marginal Propensity to Consume' (MPC) to decide how much stimulus money to send people, but this paper found that different question formats change the result by 500%. It reveals that our core data on whether people save or spend is more a product of survey design than actual human behavior.
Eliciting the Marginal Propensity to Consume in Surveys
SSRN · 6504574
Different methods of eliciting the Marginal Propensity to Consume give very different distributions. Mean MPCs range from below 0.1, indicating life-cycle consumers, to over 0.5, consistent with consumers being hand-to-mouth. We conducted a randomized survey experiment to test if this difference arises because of question wording: we compare using a direct question and a filtered question. Survey wording has large effects on (1) the mean MPC, (2) the extensive margin, and (3) how MPCs vary with