EconPapers    
Economics at your fingertips  
 

Investigating inconsistencies in complex lotteries: The role of cognitive skills of low-numeracy subjects

Selina Bruns, Daniel Hermann and Oliver Musshoff ()

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2022, vol. 97, issue C

Abstract: Comprehension in risk elicitation tasks is crucial, as otherwise the results are rather noisy than reliable. One prominent risk-elicitation tool, the Holt and Laury task (HL-task), is particularly prone to a noisy outcome - indicated by high inconsistency levels - when used among low-literacy subjects. Yet, it is unclear what drives inconsistencies. In this note we investigate the HL-task inconsistency levels of 247 smallholder farmers from rural Cambodia. Cognitive skills, measured through Raven’s Progressive Matrices (RPM), are a statistically significant determinant of inconsistency levels. A second step in the analysis reveals that cognitive skills are a statistically significant explanation for inconsistency levels for men, but not for women. Our results suggest that researchers should conduct a comprehensive pre-test when aiming at using abstract risk-elicitation methods among low-numeracy subjects in the field.

Keywords: Risk measurement; Risk attitude; Raven’s progressive matrices; Binary lottery; South-East Asia (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2214804322000167
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Investigating inconsistencies in complex lotteries: The role of cognitive skills of low-numeracy subjects (2022) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:97:y:2022:i:c:s2214804322000167

DOI: 10.1016/j.socec.2022.101840

Access Statistics for this article

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) is currently edited by Pablo Brañas Garza

More articles in Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-07-25
Handle: RePEc:eee:soceco:v:97:y:2022:i:c:s2214804322000167