To Pay or Not to Pay: Measuring Risk Preferences in Lab and Field

30 Pages Posted: 26 Oct 2020

See all articles by Pablo Brañas-Garza

Pablo Brañas-Garza

Universidad Loyola Andalucia

Lorenzo Estepa

Universidad Loyola Andalucía

Diego Jorrat

Universidad Loyola Andalucía

Victor Orozco-Olvera

World Bank

Ericka Gabriela Rascon Ramirez

Middlesex University

Date Written: September 5, 2020

Abstract

Measuring risk preferences in the field is critical for policy, however, it can be costly. For instance, the commonly used measure of Holt and Laury (2002) relies on a dozen lottery choices and payments which makes it time-consuming and costly. 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 produce the same findings using a faster and cheaper measure.

Keywords: Risk Preferences, Holt Laury, Field Experiments, Monetary Pay- Offs, Incentives

JEL Classification: D81, C91, C93

Suggested Citation

Brañas-Garza, Pablo and Estepa, Lorenzo and Jorrat, Diego and Orozco-Olvera, Victor H. and Rascon Ramirez, Ericka Gabriela, To Pay or Not to Pay: Measuring Risk Preferences in Lab and Field (September 5, 2020). Available at SSRN: https://ssrn.com/abstract=3687825 or http://dx.doi.org/10.2139/ssrn.3687825

Pablo Brañas-Garza (Contact Author)

Universidad Loyola Andalucia ( email )

c/ Escritor Castilla Aguayo
Córdoba, 14004
Spain

HOME PAGE: http://https://sites.google.com/site/pablobranasgarza/home

Lorenzo Estepa

Universidad Loyola Andalucía ( email )

c/ Escritor Castilla Aguayo
Córdoba, 14004
Spain

Diego Jorrat

Universidad Loyola Andalucía ( email )

c/ Escritor Castilla Aguayo
Córdoba, 14004
Spain

Victor H. Orozco-Olvera

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Ericka Gabriela Rascon Ramirez

Middlesex University ( email )

The Burroughs
London, NW4 4BT
United Kingdom

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