Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263482 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15266
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We find a strong relationship between risk-loving preferences and cognitive ability which becomes stronger as adherence to the generalized axiom of revealed preference (a proxy for rationality) increases. Our results are taken from a field study of individuals at the very bottom of the income distribution in a developing nation. Our results for some of the poorest in the world support recent findings drawn from subjects in wealthy Western nations, suggesting there may be a stable relationship between risk preferences and cognitive ability for the human population as a whole irrespective of socio-economic status.
Subjects: 
risk
cognitive ability
rationality
generalized axiom of revealed preference
field experiment
low incomes
developing nation
JEL: 
I11
I12
I18
C93
D03
Document Type: 
Working Paper

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