Eliciting risk preferences in an artefactual field experiment via replication and an alternative approach

Jan Jozwik ()
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Jan Jozwik: University of Oxford

Journal of the Economic Science Association, 2024, vol. 10, issue 2, No 15, 442-456

Abstract: Abstract This paper investigates risk preferences using an artefactual field experiment conducted with a non-standard subject pool of farmers in Ghana. I introduce an alternative methodology for studying preferences following replication of a seminal risk elicitation procedure by Binswanger (Am J Agric Econ 62(3):395407, 1980). An important feature of both approaches is that they are easy to understand and, hence, are particularly suitable for eliciting preferences among subjects with low levels of formal education. I successfully replicate Binswanger’s study, documenting how his original result of the moderate level of risk aversion for an average farmer can be generalized to a different country. However, using my alternative approach, whereby lotteries are presented in the loss domain, I find that half of my experimental subjects violated expected utility theory. This approach is of relevance to the current literature on studying risk preferences among subjects with poor literacy skills.

Keywords: Risk preference; Elicitation methods; Replication; Artefactual field experiments (search for similar items in EconPapers)
JEL-codes: A11 C93 D81 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s40881-024-00168-4

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