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 in a Changing World Order

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This book explores how the European Union responds to the ongoing challenges to the liberal international order. These challenges arise both within the EU itself and beyond its borders, and put into question the values of free trade and liberal democracy. 

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