Investigating inconsistencies in complex lotteries: The role of cognitive skills of low-numeracy subjects
Daniel Hermann and
Oliver Musshoff ()
Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2022, vol. 97, issue C
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)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Investigating inconsistencies in complex lotteries: The role of cognitive skills of low-numeracy subjects (2022)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:soceco:v:97:y:2022:i:c:s2214804322000167
Access Statistics for this article
Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) is currently edited by Pablo BraÃ±as 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 ().