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Comprehension and Risk Elicitation in the Field: Evidence from Rural Senegal

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  • Charness, Gary
  • Viceisza, Angelino

Abstract

In the past decade, it has become increasingly common to use simple laboratorygames and decision tasks as a device for measuring both the preferences and understanding ofrural populations in the developing world. In this paper, we report the results observed with threedistinct risk elicitation mechanisms, using samples drawn from the rural population in Senegal,West Africa. We test the understanding of and the level of meaningful responses to the typicalHolt-Laury task, to an adaptation of a simple binary mechanism pioneered by Gneezy andPotters in 1997, and to a non-incentivized willingness-to-risk scale. We find a low level ofunderstanding with the Holt-Laury task and an unlikely-to-be-accurate pattern with thewillingness-to-risk question. Our analysis indicates that the simple binary mechanism hassubstantially more predictive power than does the Holt-Laury mechanism. Our study is acautionary note regarding utilizing either relatively sophisticated risk-elicitation mechanisms ornon-incentivized questions in the rural developing world.

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Bibliographic Info

Paper provided by Department of Economics, UC Santa Barbara in its series University of California at Santa Barbara, Economics Working Paper Series with number qt5512d150.

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Date of creation: 27 Jul 2012
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Handle: RePEc:cdl:ucsbec:qt5512d150

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Keywords: Social and Behavioral Sciences; risk elicitation; laboratory experiments in the field; comprehension; rural Senegal;

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Citations

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Cited by:
  1. Paolo Crosetto & Antonio Filippin, 2012. "The "Bomb" Risk Elicitation Task," SOEPpapers on Multidisciplinary Panel Data Research, DIW Berlin, The German Socio-Economic Panel (SOEP) 517, DIW Berlin, The German Socio-Economic Panel (SOEP).
  2. Filippin, A. & Crosetto, P., 2014. "A reconsideration of gender differences in risk attitudes," Working Papers, Grenoble Applied Economics Laboratory (GAEL) 2014-01, Grenoble Applied Economics Laboratory (GAEL).
  3. Paolo Crosetto & Antonio Filippin, 2013. "A Theoretical and Experimental Appraisal of Five Risk Elicitation Methods," SOEPpapers on Multidisciplinary Panel Data Research, DIW Berlin, The German Socio-Economic Panel (SOEP) 547, DIW Berlin, The German Socio-Economic Panel (SOEP).
  4. Ihli, Hanna Julia & Musshoff, Oliver, 2013. "Understanding the Investment Behavior of Ugandan Smallholder Farmers: An Experimental Analysis," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 150331, Agricultural and Applied Economics Association.
  5. Ihli, Hanna Julia & Chiputwa, Brian & Musshoff, Oliver, 2013. "Do Changing Probabilities or Payoffs in Lottery-Choice Experiments Matter? Evidence from Rural Uganda," Discussion Papers, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development 158146, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
  6. Li Hao & Daniel Houser & Lei Mao & Marie Claire Villeval, 2014. "A Field Study of Chinese Migrant Workers' Attitudes toward Risks, Strategic Uncertainty, and Competitiveness," Working Papers, HAL halshs-00997502, HAL.
  7. Sule Alan & Nazli Baydar & Teodora Boneva & Thomas F. Crossley & Seda Ertac, 2013. "Parental Socialization Effort and the Intergenerational Transmission of Risk Preferences," Koç University-TUSIAD Economic Research Forum Working Papers, Koc University-TUSIAD Economic Research Forum 1313, Koc University-TUSIAD Economic Research Forum.
  8. Helena Szrek & Li-Wei Chao & Shandir Ramlagan & Karl Peltzer, 2012. "Predicting (un)healthy behavior: A comparison of risk-taking propensity measures," Judgment and Decision Making, Society for Judgment and Decision Making, Society for Judgment and Decision Making, vol. 7(6), pages 716-727, November.
  9. Charness, Gary & Gneezy, Uri & Imas, Alex, 2013. "Experimental methods: Eliciting risk preferences," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 87(C), pages 43-51.
  10. Ward, Patrick S. & Singh, Vartika, 2014. "Risk and ambiguity preferences and the adoption of new agricultural technologies: Evidence from field experiments in rural India:," IFPRI discussion papers, International Food Policy Research Institute (IFPRI) 1324, International Food Policy Research Institute (IFPRI).
  11. Vieider, Ferdinand M. & Lefebvre, Mathieu & Bouchouicha, Ranoua & Chmura, Thorsten & Hakimov, Rustamdjan & Krawczyk, Michal & Martinsson, Peter, 2013. "Common components of risk and uncertainty attitudes across contexts and domains: Evidence from 30 countries," Discussion Papers, WZB Junior Research Group Risk and Development, Social Science Research Center Berlin (WZB) SP II 2013-402, Social Science Research Center Berlin (WZB).
  12. Ward, Patrick S. & Singh, Vartika, 2013. "Risk and Ambiguity Preferences and the Adoption of New Agricultural Technologies: Evidence from Field Experiments in Rural India," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 150794, Agricultural and Applied Economics Association.
  13. Ihli, Hanna Julia & Musshoff, Oliver, 2013. "Investment Behavior of Ugandan Smallholder Farmers: An Experimental Analysis," Discussion Papers, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development 154775, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
  14. Norbert Hirschauer & Oliver Musshoff & Syster C. Maart-Noelck & Sven Gruener, 2014. "Eliciting risk attitudes -- how to avoid mean and variance bias in Holt-and-Laury lotteries," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 21(1), pages 35-38, January.

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