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To pay or not to pay: Measuring riskpreferences in lab and field

Author

Listed:
  • Pablo Brañas-Garza

    (Universidad Loyola)

  • Lorenzo Estepa Mohedano

    (Universidad Loyola)

  • Diego Jorrat

    (Universidad Loyola)

  • Victor Orozco

    (The World Bank)

  • Ericka Rascón Ramírez

    (Middlesex University London)

Abstract

Measuring risk preferences in the field is critical for policy, however, it can be expensive and maygenerate unequal payoffs due to bad luck. For instance, the commonly used measure of Holt andLaury (2002) relies on a dozen of lottery choices and payments which makes it time consuming andcostly, but also raises moral concerns as a result of the unequal payments generated by the lotteries.We propose a short version of the Holt and Laury (2002) which produces in the lab (Spain) thesame results as the long HL. Using the short HL in the field (Honduras and Nigeria), we observethat paying or not for the measurement of risk preferences produces the same findings. Our low-costapproach makes the measurement of risk preferences simpler, faster and cheaper in the lab and field.

Suggested Citation

  • Pablo Brañas-Garza & Lorenzo Estepa Mohedano & Diego Jorrat & Victor Orozco & Ericka Rascón Ramírez, 2021. "To pay or not to pay: Measuring riskpreferences in lab and field," Working Papers 67, Red Nacional de Investigadores en Economía (RedNIE).
    • Handle: RePEc:aoz:wpaper:67
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    File URL: https://rednie.eco.unc.edu.ar/files/DT/2021-67.pdf
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    Cited by:

    1. Pablo Brañas-Garza & Antonio M. Espín & Diego Jorrat, 2025. "£1(£5) or Nothing in Dictator Games: Unexpected Differences," Working Papers 376, Red Nacional de Investigadores en Economía (RedNIE).
    2. Ortiz, Jose M. & Teixeira, Lucas I. & Falcão, Natália N.L. & Soki, Erika A. & Almeida, Raquel M., 2024. "Information simplification and default choices improve financial decisions: A credit card statement experiment," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 110(C).
    3. Arroyos-Calvera, Danae & Lohse, Johannes & McDonald, Rebecca, 2024. "Beyond social influence: Examining the efficacy of non-social recommendations," European Economic Review, Elsevier, vol. 168(C).
    4. Novella, Rafael & Ramirez, Ericka G. Rascón, 2024. "Question-order effects on judgements under uncertainty," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 109(C).
    5. Alfonso, Antonio & Brañas-Garza, Pablo & Jorrat, Diego & Prissé, Benjamin & Francisco, María José Vázquez-De, 2025. "The baking of preferences throughout the high school," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 118(C).
    6. Kai Ruggeri & Amma Panin & Milica Vdovic & Bojana Većkalov & Nazeer Abdul-Salaam & Jascha Achterberg & Carla Akil & Jolly Amatya & Kanchan Amatya & Thomas Lind Andersen & Sibele D. Aquino & Arjoon Aru, 2022. "The globalizability of temporal discounting," Nature Human Behaviour, Nature, vol. 6(10), pages 1386-1397, October.
    7. Finocchiaro Castro, Massimo & Guccio, Calogero & Romeo, Domenica, 2025. "Assessing risk attitudes among physicians, medical students, and non-medical students with experimental data," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 117(C).
    8. Thomas Meissner & Xavier Gassmann & Corinne Faure & Joachim Schleich, 2023. "Individual characteristics associated with risk and time preferences: A multi country representative survey," Journal of Risk and Uncertainty, Springer, vol. 66(1), pages 77-107, February.
    9. Estepa-Mohedano, Lorenzo & Espinosa, María Paz, 2023. "Comparing risk elicitation in lotteries with visual or contextual aids," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 103(C).
    10. Holden, Stein T. & Tilahun, Mesfin, 2022. "Are risk preferences explaining gender differences in investment behavior?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 101(C).
    11. Alfonso, Antonio & Brañas-Garza, Pablo & Jorrat, Diego & Lomas, Pablo & Prissé, Benjamin & Vasco, Mónica & Vázquez-De Francisco, María J., 2023. "The adventure of running experiments with teenagers," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 106(C).
    12. Jurgensen, JohnMichael & McLean, Nora Nickels & Borráz-León, Javier I. & D'Anna, Valentina & Guiso, Luigi & Rustichini, Aldo & Maestripieri, Dario, 2024. "Psychosocial stress, hormones, and impulsivity/risk-taking in economic decision-making," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 112(C).
    13. Jack Fitzgerald, 2024. "Identifying the Impact of Hypothetical Stakes on Experimental Outcomes and Treatment Effects," Tinbergen Institute Discussion Papers 24-070/I, Tinbergen Institute.
    14. Lovász, Anna & Bat-Erdene, Boldmaa & Cukrowska-Torzewska, Ewa & Rigó, Mariann & Szabó-Morvai, Ágnes, 2023. "Competition, subjective feedback, and gender gaps in performance," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 102(C).
    15. Reisdorfer-da-Silva, Rômulo César & Becker, Kalinca Léia & Vieira, Kelmara Mendes, 2025. "The impact of board games on the financial literacy of public-school students," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 114(C).
    16. Alfonso-Costillo, Antonio, 2021. "Taking risks by flying paper airplanes," MPRA Paper 108541, University Library of Munich, Germany.
    17. Schrieks, Teun & Botzen, W.J. Wouter & Haer, Toon & Aerts, Jeroen C.J.H., 2024. "Drought risk attitudes in pastoral and agro-pastoral communities in Kenya," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 108(C).
    18. Awondo, Sebastain N. & Powell, Lawrence S., 2024. "Causal effects of information friction on willingness to pay for hurricane-resistant buildings," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 113(C).
    19. Bruns, Selina & Hermann, Daniel & Mußhoff, Oliver, 2022. "Investigating inconsistencies in complex lotteries: The role of cognitive skills of low-numeracy subjects," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 97(C).
    20. Truc Thanh Tran & Nam Khanh Pham, 2024. "Risk Preferences and Entrepreneurial Decision-Making: Evidence from Experimental Methods in Vietnam," Sustainability, MDPI, vol. 16(11), pages 1-16, May.
    21. Christos I. Giannikos & Andreas Kakolyris & Tin Shan Suen, 2025. "Risk attitudes and private disability insurance holdings," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 49(1), pages 23-44, March.
    22. Roig, Anthony & Thouvarecq, Régis & Rivière, James, 2025. "Economic and physical risk-taking in 7- to 9-year-olds: The link with a novelty-driven exploratory strategy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 117(C).
    23. Pablo Brañas-Garza & Diego Jorrat & Antonio M. Espín & Angel Sánchez, 2023. "Paid and hypothetical time preferences are the same: lab, field and online evidence," Experimental Economics, Springer;Economic Science Association, vol. 26(2), pages 412-434, April.

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    Keywords

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    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments

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