Eliciting risk preferences in an artefactual field experiment via replication and an alternative approach

Journal article

This paper investigates risk preferences using an artefactual field experiment conducted with a non-standard subject pool of farmers in Ghana. I introduce an alternative methodology for studying preferences following replication of a seminal risk elicitation procedure by Binswanger (Am J Agric Econ 62(3):395407, 1980). An important feature of both approaches is that they are easy to understand and, hence, are particularly suitable for eliciting preferences among subjects with low levels of formal education. I successfully replicate Binswanger’s study, documenting how his original result of the moderate level of risk aversion for an average farmer can be generalized to a different country. However, using my alternative approach, whereby lotteries are presented in the loss domain, I find that half of my experimental subjects violated expected utility theory. This approach is of relevance to the current literature on studying risk preferences among subjects with poor literacy skills.

Authors: Jozwik, J

• Publication status: Published
• Peer review status: Peer reviewed
• Publisher: Springer
• Journal: Journal of the Economic Science Association
• Volume: 10
• Issue: 2
• Pages: 442-456
• Publication date: 2024-05-10
• Acceptance date: 2024-02-26
• DOI: 10.1007/s40881-024-00168-4
• EISSN: 2199-6776
• ISSN: 2199-6784
• Language: English
• Keywords: C93; D81; A11; Risk preference; Artefactual field experiments; Elicitation methods; Replication