Stability of Experimental and Survey Measures of Risk, Time, and Social Preferences: A Review and Some New Results

51 Pages Posted: 6 Nov 2013 Last revised: 26 Jun 2015

See all articles by Yating Chuang

Yating Chuang

University of Wisconsin - Madison - Department of Agricultural & Applied Economics

Laura Schechter

University of Wisconsin at Madison - Agricultural and Applied Economics; University of Wisconsin at Madison - Economics

Date Written: June 25, 2015

Abstract

Underlying preferences are often considered to be persistent, and are important inputs into economic models. We first conduct an extensive review of the disparate literature studying the stability of preferences measured in experiments. Then, we test the stability of individuals’ choices in panel data from rural Paraguay over almost a decade. Answers to social preference survey questions are quite stable. Experimental measures of risk, time, and social preferences do not exhibit much stability. Correlations between experimental measures of risk aversion are a more precisely estimated zero, whereas correlations for time and social preferences are larger and noisier. We also find no systematic evidence that real world shocks influence play in games. We suggest that in a developing country context researchers should explore designing simpler experiments and including survey questions in addition to experiments to measure preferences.

Keywords: stability of preferences, risk preferences, time preferences, social preferences

JEL Classification: C90, D81, O1

Suggested Citation

Chuang, Yating and Schechter, Laura, Stability of Experimental and Survey Measures of Risk, Time, and Social Preferences: A Review and Some New Results (June 25, 2015). Available at SSRN: https://ssrn.com/abstract=2349400 or http://dx.doi.org/10.2139/ssrn.2349400

Yating Chuang

University of Wisconsin - Madison - Department of Agricultural & Applied Economics ( email )

427 Lorch St.
Madison, WI 53706-1503
United States

Laura Schechter (Contact Author)

University of Wisconsin at Madison - Agricultural and Applied Economics ( email )

427 Lorch St.
Madison, WI 53706-1503
United States

HOME PAGE: http://aae.wisc.edu/lschechter

University of Wisconsin at Madison - Economics ( email )

William H. Sewell Social Science Building
1180 Observatory Drive
Madison, WI 53706-1393
United States

HOME PAGE: http://aae.wisc.edu/lschechter

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