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Measuring Individual Risk Attitudes in the Lab: Task or Ask? An Empirical Comparison
This paper reports on an empirical comparison of two prominent measures of individual risk
attitudes – the Holt and Laury (2002) lottery-choice task and the multi-item questionnaire
advocated by Dohmen et al. (2011) – with respect to their within-subject stability over
time (one year) and their correlation with actual risk-taking behavior in the lab – here the
amount sent in a trust game (Berg et al., 1995). Our results suggest that the two risk attitude
measures are at best only weakly correlated. Only the questionnaire measure shows high
test–retest stability, 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 behavior. With respect
to behavior in the trust game, we find a high retest stability of transfers. This supports
the conjecture that trusting behavior has a component which itself is a stable individual
characteristic.