To Pay or Not to Pay: Measuring Risk Preferences in Lab and Field
30 Pages Posted: 26 Oct 2020
Date Written: September 5, 2020
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: Suggested Citation