Consistency of Risk Preference Measures: An Artefactual Field Experiment from Rural China

Abstract

A variety of measures have been developed to elicit individual risk preferences. How these measures perform in the field, in particular in developing countries with non-student subjects, is still an open question. We implement an artefactual field experiment in rural China to investigate (i) consistency across incentivised experimental risk measures, (ii) consistency in risk preferences elicitation between non-incentivised survey measures and incentivised experiments, and (iii) possible explanations for risk preference inconsistency across measures. We find that inconsistent risk preferences across survey and experimental measures may be explained by ambiguity preferences. In the survey, subjects may mix risk and ambiguity preferences.