Comprehension and Risk Elicitation in the Field: Evidence from Rural Senegal

In the past decade, it has become increasingly common to use simple laboratory games and decision tasks as a device for measuring both the preferences and understanding of rural populations in the developing world. In this paper, we report the results observed with three distinct risk elicitation mechanisms, using samples drawn from the rural population in Senegal. We test the understanding and the level of meaningful responses to the typical Holt-Laury task, to an adaptation of a simple binary mechanism pioneered by Gneezy and Potters in 1997, and to a non-incentivized willingness-to-risk scale. We find a low level of understanding with the Holt-Laury task and an unlikely-to-be-accurate pattern with the willingness-to-risk question. Our study is a cautionary note regarding utilizing relatively sophisticated risk-elicitation mechanisms in the rural developing world.