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Stability of Risk Preference Measures: Results from a Field Experiment on French Farmers

Couture, Stéphane and Reynaud, Arnaud (2010) Stability of Risk Preference Measures: Results from a Field Experiment on French Farmers. TSE Working Paper, n. 10-151

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We compare three different elicitation methods for measuring risk attitudes of French farmers in a field experiment setting. We consider two experiments based on the lottery choices initially proposed by Holt and Laury (2002) and by Eckel and Grossman (2002,2008), a risk-taking psychological questionnaire and a self-reporting of perceived risk attitudes for different domains. The main empirical results from this within-subject study are the following. First, within the
class of lottery choices, risk preference measures are affected by the type of mechanism used. In particular, farmers appear to be more risk averse using the Eckel and Grossman lottery than using the Holt and Laury one. However attitudes towards risk are significantly correlated
across lotteries which means that the ranking of risk preferences seems to be preserved. Second,
risk preferences appear to be context-dependent. French farmers are highly risk averse for
decisions belonging to financial and ethical domains. They report a higher willingness to take
risk for professional decisions. Lastly, using the psychological questionnaire, we find that the risk
attitude elicited through lottery choices often correlates with risk attitude toward investments.
These findings contribute to the literature which addresses the stability of risk preferences across
elicitation methods.

Item Type: Monograph (Working Paper)
Language: English
Date: 3 May 2010
Uncontrolled Keywords: Risk preferences, psychological economics, field experiment, experimental economics
JEL Classification: C91 - Laboratory, Individual Behavior
D8 - Information, Knowledge, and Uncertainty
J16 - Economics of Gender; Non-labor Discrimination
Q12 - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 18 Jan 2012 06:01
Last Modified: 02 Apr 2021 15:36
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