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Measures of cognitive ability and choice inconsistency

Author

Listed:
  • Willadsen, Helene
  • Zaccagni, Sarah
  • Piovesan, Marco
  • Wengström, Erik

Abstract

Cognitive skills affect individual choices. Researchers commonly use Raven's Progressive Matrices (RPM) tests and the Cognitive Reflection Test (CRT) to assess the relationship between cognitive abilities and economic decision making. In this paper, we study the relationship between these measures, and investigate the extent to which they are correlated and whether they are best described as substitutes or complements. Combining a sample of 686 children and a sample of 2,332 adults, we compare individual performances in the RPM test and CRT test. First, we report a significant positive correlation between the two measures of 0.3. Second, we document that performance in both the RPM test and CRT are significant predictors of behavioral inconsistency observed in incentivized time and risk preference elicitation tasks for children and risk preference elicitation task for adults.

Suggested Citation

  • Willadsen, Helene & Zaccagni, Sarah & Piovesan, Marco & Wengström, Erik, 2024. "Measures of cognitive ability and choice inconsistency," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 495-506.
    • Handle: RePEc:eee:jeborg:v:220:y:2024:i:c:p:495-506
    DOI: 10.1016/j.jebo.2024.02.029
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    More about this item

    Keywords

    Intelligence; Raven Progressive Matrices; Cognitive Reflection; Cognitive Skills; Inconsistent Behavior; Time Preference; Risk Preference;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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