Working Paper No. 765

Is Financial Risk-taking Behavior Genetically Transmitted?

Published: September 23, 2008Pages: 40Keywords: Genetics; Risk-Taking; Portfolio Investment; TwinsJEL-codes: D01; G11

Is Financial Risk-taking Behavior Genetically Transmitted? David Cesarini, Magnus Johannesson, Paul Lichtenstein, Örjan Sandewall and Björn Wallace


In this paper, we use a sample of almost 30,000 Swedish mono- and dizygotic twins to study the heritability of financial risk-taking. Following a major pension reform in the year 2000, virtually all Swedish adults had to simultaneously make a finnancial decision a¤ecting post-retirement wealth. We take this event as a field experiment to infer risk preferences. We use standard techniques from behavior genetics to partition variation in risk-taking into environmental and genetic components. Our findings suggest that genetic variation is an important source of individual heterogeneity in financial risk-taking.

 

Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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