Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/201415 
Year of Publication: 
2017
Series/Report no.: 
DIW Discussion Papers No. 1608
Version Description: 
Revised version, February 2017
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
We compare seven established risk elicitation methods and investigate how robustly they explain eleven kinds of risky behavior with 760 individuals. Risk measures are positively correlated; however, their performance in explaining behavior is heterogeneous and, therefore, difficult to assess ex ante. Greater diversification across risk measures is conducive to closing this knowledge gap. What we find is that performance increases considerably if we combine single-item risk measures to form multiple-item risk measures. Results are improved the more single-item measures they contain, and also if these single-item risk measures use different elicitation methods. Interestingly, survey items perform just as well as incentivized experimental items in explaining risky behavior.
Subjects: 
Risk
experiments
household survey
testing methods
contexts
JEL: 
D81
C93
O12
Document Type: 
Working Paper

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