Simultaneous measure of risk, time, environmental and social preferences and their variation with relative poverty

Recent evidence has shown that, in the context of participation decisions in Payment for Ecosystem Service schemes, land managers’ choices are determined by a wider set of factors than the literature has traditionally focused on and could, furthermore, be influenced by cognitive biases (Clot et al 2014; 2015, 2017a). This wider set includes the extent to which people care about their neighbour’s wellbeing, or the behaviour of “relevant others” (Kuhfuss et al., 2016); and farmers’ concerns for environmental outcomes (Kuhfuss et al., 2022). Assessing this complex set of preferences is difficult (Clot et al. 2017 b). In this paper, we present a method for estimating time, risk, social and environmental preferences simultaneously using incentivized choice experiments. This approach builds on work by Ida and Goto (2009). We test our new method in the lab, comparing our results with “standard” survey questions. This exercise is repeated in two time periods where the relative income of student participants varies – before and after they receive annual stipend payments – to capture changes in relative poverty. We show that our new method produces results that are consistent with standard survey-based questions at the aggregated level for risk preferences. Moreover, we find robust evidence that individuals are less risk averse when relatively wealthier.