Abstract
There is widespread interest in measuring risk attitudes and incorporating such measures into broader econometric analyses. We consider three elicitation procedures currently in use. We find considerable variability within – and even more, between – the results they produce. We suggest that this reflects the way that different instruments interact with imprecise underlying preferences. The short-run implication is that such procedures need to be used with caution and are likely to be highly context-specific. The longer run implication is that adding ‘white noise’ to deterministic models is inadequate: we need to develop models that allow for imprecision and procedural variation.
Original language | English |
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Pages (from-to) | 569-593 |
Number of pages | 25 |
Journal | The Economic Journal |
Volume | 124 |
Issue number | 576 |
DOIs | |
Publication status | Published - 1 May 2014 |