We thank Joern Ewald for his assistance on earlier drafts of this paper. We further thank the anonymous reviewers and the editors for their helpful comments that have improved this paper. We gratefully acknowledge financial support from Deutsche Forschungsgemeinschaft (DFG).
Measuring the risk attitude of decision-makers: are there differences between groups of methods and persons?†
Article first published online: 4 FEB 2013
© 2013 Australian Agricultural and Resource Economics Society Inc. and Wiley Publishing Asia Pty Ltd
Australian Journal of Agricultural and Resource Economics
Volume 58, Issue 3, pages 336–352, July 2014
How to Cite
Maart-Noelck, S. C. and Musshoff, O. (2014), Measuring the risk attitude of decision-makers: are there differences between groups of methods and persons?. Australian Journal of Agricultural and Resource Economics, 58: 336–352. doi: 10.1111/j.1467-8489.2012.00620.x
- Issue published online: 7 JUL 2014
- Article first published online: 4 FEB 2013
- contextualized statements;
- measuring the risk attitude;
Many studies quantifying individual risk preferences of test persons show that results of different measuring methods may vary. Additional reservations about the reliability of the results regarding the risk attitude measurement arise from the fact that most studies are based on convenience groups, such as students or businessmen in developing countries. With this in mind, we systematically compare different measuring methods to answer the question how the choice of method affects the results. Moreover, we compare the risk preferences of German farmers with those of students and Kazakhstani farmers to investigate whether farmers’ risk preferences can be approximated through those of convenience groups. The methods applied comprise an incentive-compatible Holt-and-Laury-lottery as well as two psychometric methods. Results show that students respond consistently across all three elicitation methods whereas German and Kazakhstani farmers are more inconsistent. Significant differences exist in the responses of German students and German farmers. The comparison of risk preferences between German and Kazakhstani farmers, however, reveals significant similarities with respect to the psychometric methods.