Cognitive ability affects the coherence between preference estimates

Cognitive ability affects the estimation of people’s economic preferences—such as their willingness to take risks and discount delayed rewards. We show that the correlation between preference estimates obtained from separate instruments depends on respondents’ cognitive ability. We establish the effect in three large-scale (N = 1196; N = 522; N = 1507), open-access datasets and rule out noise as the sole explanation. We then interrogate the underlying mechanisms in two novel laboratory experiments (N = 168; N =337). We show that people with lower cognitive ability use simpler strategies in preference elicitation tasks and are less likely to interpret risk in a manner that aligns with researchers’ normative definition. When respondents’ subjective interpretation of risk is used, as opposed to the normative definition, coherence between instruments increases. These results have consequences for both theorists and practitioners who study latent economic preferences and apply them in pursuit of better policy.