Attitudes Toward Risk: Experimental Measurement in Rural India

1980/08/01 by Hans P. Binswanger · 1,632 citations
Agricultural and Biological Sciences · Business, Management and Accounting · Decision Sciences · Mathematics · Psychology · #Actuarial science #Agricultural risk and resilience #Certainty #Decision-Making and Behavioral Economics #Econometrics #Economics #Expected utility hypothesis #Financial Literacy, Pension, Retirement Analysis #Financial economics #Interview #Mathematics #Microeconomics #Psychology #Risk aversion (psychology) #Social psychology #Sociology #Stochastic game #Variation (astronomy)

paper · doi:10.2307/1240194

published in American Journal of Agricultural Economics 62(3), 395-407 (Wiley)

openalex publication_date 1980/08/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/29

Abstract

Abstract Attitudes toward risk were measured in 240 households using two methods: an interview method eliciting certainty equivalents and an experimental gambling approach with real payoffs which, at their maximum, exceeded monthly incomes of unskilled laborers. The interview method is subject to interviewer bias and its results were totally inconsistent with the experimental measures of risk aversion. Experimental measures indicate that, at high payoff levels, virtually all individuals are moderately risk‐averse with little variation according to personal characteristics. Wealth tends to reduce risk aversion slightly, but its effect is not statistically significant.

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