A structural model of children’s choices finds that measured psychological traits are more strongly related to decision noise and guessing than to risk preferences themselves.
Research question
How do cognitive skills and personality relate to children’s risk preferences and to the precision with which those preferences are measured?
Method & data
Rich data on Chinese schoolchildren are analyzed with a structural model that separates preferences, deliberation noise, and guessing.
Main finding
The abstract reports weak direct links from psychological measures to preferences but strong links to deliberation noise and guessing, with persistent individual components in choice shocks.
Why it matters
Preference elicitation can confound what people want with how precisely they process and answer the choice problem.
What to verify
The public abstract does not describe the sampling frame or how the measurement results generalize outside the study population.
Show public abstract used for this summary
Using rich data on Chinese schoolchildren, we study the relationships of IQ and personality traits with children’s risk preferences and how they affect the precision with which those preferences are measured. Our structural model separates preferences from deliberation noise and guessing, and relates guessing to deliberation noise. Psychological measures have weak direct influences on preferences but strongly affect deliberation noise and guessing behavior. Shocks to choice have persistent individual-specific components and are not independent. Socioeconomic background has little direct influence on preferences or deliberation noise once traits are accounted for. Background variables affect psychological traits, however. Risk preferences differ across and within genders. For small gambles, girls are less risk averse than boys, but the opposite holds for larger gambles.