Measuring risk preference: temporal stability, convergent validity, and age differences

Across various domains in life we need to make choices where the outcomes are not guaranteed and there is the potential for a loss. Individuals differ in their willingness to partake in risky activities or make choices under risk. Risk preference, is a psychological construct that reflects individual’s appetite for risk. Various disciplines, in particular, psychology and economics, have developed risk preference measures and used these to investigate inter and intra-individual differences. Despite the popularity of risk preference in the behavioural sciences, we lack a clear understanding of how stable this construct is and how coherently it is captured. This lack of clarity can have consequences on how well we understand and quantify individual differences in risk preference, in particular age differences. This dissertation aims to address these open questions by using meta-analytic methods, where we synthesised and analysed data from various sources. In three studies we: (1) compare the temporal stability and convergent validity of risk preference measures; (2) assess to what extent published evidence on age differences in task-based risk-taking aligns with theoretical predictions; and (3) how self-reported risk-taking propensity changes across adulthood. Overall, (1) we observe substantial differences in the temporal stability of risk preference measures and an overall lack of convergence; (2) whilst most theories predict an age-related decline in risk taking, this is not in line with the evidence observed from behavioural tasks; in contrast (3) we note across several domains, that self-reported risk-taking propensity declines with age. Through these three studies, we show that not all measures of risk preference are comparable, and that we need to establish a clearer definition and operationalisation of the construct. This has implications for the understanding of individual differences, as well as the development and evaluation of theories.