Investigating inconsistencies in complex lotteries: The role of cognitive skills of low-numeracy subjects

B-Tier
Journal: Journal of Behavioral and Experimental Economics
Year: 2022
Volume: 97
Issue: C

Authors (3)

Bruns, Selina (not in RePEc) Hermann, Daniel (not in RePEc) Mußhoff, Oliver (not in RePEc)

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Comprehension in risk elicitation tasks is crucial, as otherwise the results are rather noisy than reliable. One prominent risk-elicitation tool, the Holt and Laury task (HL-task), is particularly prone to a noisy outcome - indicated by high inconsistency levels - when used among low-literacy subjects. Yet, it is unclear what drives inconsistencies. In this note we investigate the HL-task inconsistency levels of 247 smallholder farmers from rural Cambodia. Cognitive skills, measured through Raven’s Progressive Matrices (RPM), are a statistically significant determinant of inconsistency levels. A second step in the analysis reveals that cognitive skills are a statistically significant explanation for inconsistency levels for men, but not for women. Our results suggest that researchers should conduct a comprehensive pre-test when aiming at using abstract risk-elicitation methods among low-numeracy subjects in the field.

Technical Details

RePEc Handle
repec:eee:soceco:v:97:y:2022:i:c:s2214804322000167
Journal Field
Experimental
Author Count
3
Added to Database
2026-01-26