Not-so-encouraging results

A first shot to see if my Possible Topic#2 might work. The results, unfortunately, are not so encouraging.

Here's why. The first of the hypothetical risk question is a filter to sort out ‘irrational’ individuals, or to make sure that they understood the question:

Suppose you are offered two ways to earn some money. With option 1, you are guaranteed Rp800 thousand per month. With option 2, you have an equal chance of either the same income, Rp800 thousand per month, or, if you are lucky, Rp1.6 million per month, which is more. Which option will you choose?

By the way, the questions were asked to adult individuals, and there are around 29 thousand of them in this category. If the respondent answered (1), the interviewers would make sure if they stood by their choice or wanted to switch. Even after the follow-up question, 42 percent respondents are 'irrational' - meaning they opted for a certain Rp800 thousand, even if the other option would not make them worse off. The number, for me, is too high and will pose a serious potential bias in the analysis.

After completing a series of further questions, the 'rational' individuals are categorized into for groups, from the most risk-averse to the most risk-loving. Half of them belong to the most risk-averse group; about a quarter are most risk-loving, 14 percent are somewhat risk-loving, and less than 10 percent are somewhat risk-averse (see picture). The distribution implies that the variations across group are quite small, which lead to a question whether we can see an interesting story from that.

And there are some other concerns I got from various discussions:

• Since these are not true experiments but hypothetical, the noise may be big to infer anything.
• These are hypothetical risk question about money/income. But people may have a different answer if it involves health. So applying this type of gamble to health behavior may not be correct.

It is too early to kill of the topic completely, but it does not give me an 'Eureka moment' either. So I am now shopping for another possible topic.