Estimating risk and time preferences over public lotteries: Findings from the field and stream

Public lotteries for non-market goods provide a unique field counterpart to experimental lotteries with monetary payoffs for investigating risk and time preferences. In this paper random expected utility and rank dependent expected utility models of public lottery choice are estimated under constant relative risk aversion preferences and hyperbolic time preferences with a balanced panel of 7,924 participants in the 127 lotteries for elk hunting licenses in New Mexico in the year before and after a set of natural policy experiments. Consistent with experimental findings, significant heterogeneity in risk and time preferences is found in applicant choices, and applicants are found to significantly place a nonlinear weight on both the probability of being drawn and of harvesting an elk. Mean discount rate estimates are also on a par with experimental results documented in the growing joint risk-time preferences literature.