Children’s rationality, risk attitudes and field behavior

We investigate the relationship between risk attitudes, choice consistency and field behavior of children by conducting economic experiments with 1275 8th graders. Choices are not completely consistent with any of the economic theories we consider, however, they are not random either. We use our experimental data to structurally estimate risk preferences and correct for decision error. Using a measure constructed from the estimates and individual choices, we find that risk preferences do predict future field behavior. Children who are more risk averse are less likely to receive disciplinary referrals one and two years after the experiment and are more likely to complete high school, even controlling for economic rationality, family background, scholarly achievement and past misbehavior. Accounting for decision error turns out to be important as a simple aggregate measure of risk is not found to be correlated with field behavior.