Measuring Individual Risk Attitudes in the Lab: Task orAsk? An Empirical Comparison

This paper compares two prominent empirical measures of individualrisk attitudes | the Holt and Laury (2002) lottery-choice task and the multi-itemquestionnaire advocated by Dohmen, Falk, Human, Schupp, Sunde and Wagner(forthcoming) | with respect to (a) their within-subject stability over time (oneyear) and (b) their correlation with actual risk-taking behaviour in the lab | herethe amount sent in a trust game (Berg, Dickaut, McCabe, 1995). As it turns out,the measures themselves are uncorrelated (both times) and, most importantly, onlythe questionnaire measure exhibits test-re-test stability (p = :78), while virtually nosuch stability is found in the lottery-choice task. In addition, only the questionnairemeasure shows the expected correlations with a Big Five personality measure and iscorrelated with actual risk-taking behaviour. The results suggest that the questionnaireis the more adequate measure of individual risk attitudes for the analysis ofbehaviour in economic (lab) experiments. Moreover, with respect to trust, the highre-test stability of trust transfers (p = :70) further supports the conjecture that trustingbehaviour indeed has a component which itself is a stable individual characteristic(Glaeser, Laibson, Scheinkman and Soutter, 2000).