| By: |
Jan-Erik Lönnqvist (Faculty of Behavioural Sciences, University of Helsinki, Finland);
Markku Verkasalo (Faculty of Behavioural Sciences, University of Helsinki, Finland);
Gari Walkowitz (Department of Management, University of Cologne, Germany);
Philipp C. Wichardt (Institute of Economic Theory 3, University of Bonn, Germany) |
| Abstract: |
This paper compares two prominent empirical measures of individual risk
attitudes - the Holt and Laury (2002) lottery-choice task and the multi-item
questionnaire advocated by Dohmen, Falk, Huffman, Schupp, Sunde and Wagner
(forthcoming) - with respect to (a) their within-subject stability over time
(one year) and (b) their correlation with actual risk-taking behaviour in the
lab - here the amount sent in a trust game (Berg, Dickaut, McCabe, 1995). As
it turns out, the measures themselves are uncorrelated (both times) and, most
importantly, only the questionnaire measure exhibits test-re-test stability (Ï
= .78), while virtually no such stability is found in the lottery-choice task.
In addition, only the questionnaire measure shows the expected correlations
with a Big Five personality measure and is correlated with actual risk-taking
behaviour. The results suggest that the questionnaire measure is a better
measure of individual risk attitudes than the lottery-choice task. Moreover,
with respect to trust, the high re-test stability of trust transfers (Ï = .70)
further supports the conjecture that trusting behaviour indeed has a component
which itself is a stable individual characteristic (Glaeser, Laibson,
Scheinkman and Soutter, 2000). |