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Are Attitudes Towards Economic Risk Heritable? Analyses Using the Australian Twin Study of Gambling

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Author Info

  • Le, Anh T.

    ()
    (Curtin University)

  • Miller, Paul W.

    (Curtin University)

  • Slutske, Wendy S.

    ()
    (University of Missouri-Columbia)

  • Martin, Nicholas G.

    ()
    (Queensland Institute of Medical Research)

Abstract

This study employs multiple regression models based on DeFries and Fulker (1985), and a large sample of twins, to assess heritability in attitudes towards economic risk, and the extent to which this heritability differs between males and females. Consistent with Cesarini, Dawes, Johannesson, Lichtenstein and Wallace (2009), it is found that attitudes towards risk are moderately heritable, with about 20 percent of the variation in these attitudes across individuals being linked to genetic differences. This value is less than one-half the estimates reported by Zyphur, Narayanan, Arvey and Alexander (2009) and Zhong, Chew, Set, Zhang, Xue, Sham, Ebstein and Israel (2009). While females are more risk averse than males, there is no evidence that heritability in attitudes towards risk differs between males and females. Even though heritability is shown to be important to economic risk taking, the analyses suggest that multivariate studies of the determinants of attitudes towards risk which to not take heritability into consideration still provide reliable estimates of the partial effects of other key variables, such as gender and educational attainment.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4859.

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Length: 28 pages
Date of creation: Mar 2010
Date of revision:
Publication status: published in: Twin Research and Human Genetics, 2010, 13 (4), 330-339
Handle: RePEc:iza:izadps:dp4859

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Keywords: risk; heritability; gender;

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References

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  1. Armin Falk & James J. Heckman, 2009. "Lab Experiments are a Major Source of Knowledge in the Social Sciences," Working Papers, Geary Institute, University College Dublin 200935, Geary Institute, University College Dublin.
  2. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jurgen Schupp & Gert Wagner, 2005. "Individual risk attitudes: New evidence from a large, representative, experimentally-validated survey," Framed Field Experiments 00140, The Field Experiments Website.
  3. Le, Anh T. & Miller, Paul W. & Heath, Andrew C. & Martin, Nick, 2005. "Early childhood behaviours, schooling and labour market outcomes: estimates from a sample of twins," Economics of Education Review, Elsevier, Elsevier, vol. 24(1), pages 1-17, February.
  4. David, Cesarini & Dawes, Christopher T. & Johannesson, Magnus & Lichtenstein, Paul & Wallace, Björn, 2007. "Genetic Variation in Preferences for Giving and Risk-Taking," Working Paper Series in Economics and Finance 679, Stockholm School of Economics, revised 12 Jan 2009.
  5. Miller, Paul & Mulvey, Charles & Martin, Nick, 2005. "Birth weight and schooling and earnings: estimates from a sample of twins," Economics Letters, Elsevier, Elsevier, vol. 86(3), pages 387-392, March.
  6. Dorothe Bonjour & Lynn F. Cherkas & Jonathan E. Haskel & Denise D. Hawkes & Tim D. Spector, 2003. "Returns to Education: Evidence from U.K. Twins," American Economic Review, American Economic Association, American Economic Association, vol. 93(5), pages 1799-1812, December.
  7. Holger Bonin & Amelie Constant & Konstantinos Tatsiramos & Klaus Zimmermann, 2009. "Native-migrant differences in risk attitudes," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 16(15), pages 1581-1586.
  8. Miller, Paul W & Mulvey, Charles & Martin, Nick, 1995. "What Do Twins Studies Reveal about the Economic Returns to Education? A Comparison of Australian and U.S. Findings," American Economic Review, American Economic Association, American Economic Association, vol. 85(3), pages 586-99, June.
  9. Catherine C. Eckel & Philip J. Grossman, 2002. "Sex Differences and Statistical Stereotyping in Attitudes Toward Financial Risk," Development Research Unit Working Paper Series, Monash University, Department of Economics archive-03, Monash University, Department of Economics.
  10. Alan Krueger & Orley Ashenfelter, 1992. "Estimates of the Economic Return to Schooling from a New Sample of Twins," NBER Working Papers 4143, National Bureau of Economic Research, Inc.
  11. Renate Schubert, 1999. "Financial Decision-Making: Are Women Really More Risk-Averse?," American Economic Review, American Economic Association, American Economic Association, vol. 89(2), pages 381-385, May.
  12. Miller, Paul & Mulvey, Charles & Martin, Nick, 2006. "The return to schooling: Estimates from a sample of young Australian twins," Labour Economics, Elsevier, Elsevier, vol. 13(5), pages 571-587, October.
  13. Miller, Paul & Mulvey, Charles & Martin, Nick, 1996. "Multiple Regression Analysis of the Occupational Status of Twins: A Comparison of Economic and Behavioural Genetics Models," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(2), pages 227-39, May.
  14. Hartog, Joop & Ferrer-i-Carbonell, Ada & Jonker, Nicole, 2002. "Linking Measured Risk Aversion to Individual Characteristics," Kyklos, Wiley Blackwell, Wiley Blackwell, vol. 55(1), pages 3-26.
  15. Orley Ashenfelter & Cecilia Rouse, 1997. "Income, Schooling, and Ability: Evidence from a New Sample of Identical Twins," NBER Working Papers 6106, National Bureau of Economic Research, Inc.
  16. Powell, Melanie & Ansic, David, 1997. "Gender differences in risk behaviour in financial decision-making: An experimental analysis," Journal of Economic Psychology, Elsevier, Elsevier, vol. 18(6), pages 605-628, November.
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Cited by:
  1. Le, Anh T. & Miller, Paul W. & Slutske, Wendy S. & Martin, Nicholas G., 2011. "Attitudes towards economic risk and the gender pay gap," Labour Economics, Elsevier, Elsevier, vol. 18(4), pages 555-561, August.
  2. Necker, Sarah & Voskort, Andrea, 2014. "Intergenerational transmission of risk attitudes – A revealed preference approach," European Economic Review, Elsevier, Elsevier, vol. 65(C), pages 66-89.

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