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To pay or not to pay: Measuring risk preferences in lab and field

Pablo Brañas-Garza, Lorenzo Estepa Mohedano, Diego Jorrat (), Víctor Orozco and Ericka Rascon-Ramirez ()

MPRA Paper from University Library of Munich, Germany

Abstract: Measuring risk preferences in the field is critical for policy, however, it can be expensive and may generate unequal payoffs due to bad luck. For instance, the commonly used measure of Holt and Laury (2002) relies on a dozen of lottery choices and payments which makes it time consuming and costly, but also raises moral concerns as a result of the unequal payments generated by the lotteries. We propose a short version of the Holt and Laury (2002) which produces in the lab (Spain) the same results as the long HL. Using the short HL in the field (Honduras and Nigeria), we observe that paying or not for the measurement of risk preferences produces the same findings. Our low-cost approach makes the measurement of risk preferences simpler, faster and cheaper in the lab and field.

Keywords: Risk preferences; Holt Laury; Field Experiments; Monetary Payoffs; Incentives. (search for similar items in EconPapers)
JEL-codes: C91 C93 D81 (search for similar items in EconPapers)
Date: 2020-09-23
New Economics Papers: this item is included in nep-cbe and nep-exp
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