Risk preference shares the psychometric structure of major psychological traits

Risk preference shares the psychometric structure of major psychological traits
Renato Frey, Andreas Pedroni, Rui Mata, Jörg Rieskamp and Ralph Hertwig (2017)

Abstract

To what extent is there a general factor of risk preference, R, akin to g, the general factor of intelligence? Can risk preference be regarded as a stable psychological trait? These conceptual issues persist because few attempts have been made to integrate multiple risk-taking measures, particularly measures from different and largely unrelated measurement traditions (self-reported propensity measures assessing stated preferences, incentivized behavioral measures eliciting revealed preferences, and frequency measures assessing actual risky activities). Adopting a comprehensive psychometric approach (1507 healthy adults completing 39 risk-taking measures, with a subsample of 109 participants completing a retest session after 6 months), we provide a substantive empirical foundation to address these issues, finding that correlations between propensity and behavioral measures were weak. Yet, a general factor of risk preference, R, emerged from stated preferences and generalized to specific and actual real-world risky activities (for example, smoking). Moreover, R proved to be highly reliable across time, indicative of a stable psychological trait. Our findings offer a first step toward a general mapping of the construct risk preference, which encompasses both general and domain-specific components, and have implications for the assessment of risk preference in the laboratory and in the wild.