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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.

Suggested Citation

  • Charness, Gary & Viceisza, Angelino, 2012. "Comprehension and Risk Elicitation in the Field: Evidence from Rural Senegal," University of California at Santa Barbara, Economics Working Paper Series qt5512d150, Department of Economics, UC Santa Barbara.
  • Handle: RePEc:cdl:ucsbec:qt5512d150
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    References listed on IDEAS

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    Keywords

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