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The Promises and Pitfalls of Genoeconomics

Author

Listed:
  • Daniel J. Benjamin

    () (Department of Economics, Cornell University, Ithaca, New York 14853; National Bureau of Economic Research, Cambridge,Massachusetts 02138)

  • David Cesarini

    (Center for Experimental Social Science and Department of Economics, New York University, New York, NY 10012)

  • Christopher F. Chabris

    (Department of Psychology, Union College, Schenectady, New York 12308)

  • Edward L. Glaeser

    (Department of Economics, Harvard University, and National Bureau of Economic Research, Cambridge, Massachusetts 02138)

  • David I. Laibson

    (Department of Economics, Harvard University, and National Bureau of Economic Research, Cambridge, Massachusetts 02138)

  • Vilmundur Guðnason

    (Icelandic Heart Association, OS-201 Kopavogur, Iceland)

  • Tamara B. Harris

    (Laboratory of Epidemiology, Demography, and Biometry, National Institute on Aging, Bethesda, Maryland 28092)

  • Lenore J. Launer

    (Laboratory of Epidemiology, Demography, and Biometry, National Institute on Aging, Bethesda, Maryland 28092)

  • Shaun Purcell

    (Center for Human Genetics Research, Massachusetts General Hospital, Boston, Massachusetts 02114)

  • Albert Vernon Smith

    (Icelandic Heart Association, OS-201 Kopavogur, Iceland)

  • Magnus Johannesson

    (Department of Economics, Stockholm School of Economics, SE-113 83 Stockholm, Sweden)

  • Patrik K.E. Magnusson

    (Department of Medical Epidemiology and Biostatistics, Karolinska Institutet, SE-171 77 Stockholm, Sweden)

  • Jonathan P. Beauchamp

    (McKinsey Consulting, Montreal, H3B 4W8 Quebec, Canada)

  • Nicholas A. Christakis

    (Department of Sociology, Harvard University, Cambridge, Massachusetts 02138; Department of Health Care Policy, Harvard Medical School, Boston, Massachusetts 02115)

  • Craig S. Atwood

    (Department ofMedicine, University ofWisconsin-Madison,Madison,Wisconsin 53705)

  • Benjamin Hebert

    (Department of Economics, Harvard University, Cambridge, Massachusetts 02138)

  • Jeremy Freese

    (Department of Sociology, Northwestern University, Evanston, Illinois 60208)

  • Robert M. Hauser

    (Department of Sociology, University ofWisconsin-Madison, Madison, Wisconsin 53706)

  • Taissa S. Hauser

    (Department of Sociology, University ofWisconsin-Madison, Madison, Wisconsin 53706)

  • Alexander Grankvist

    (Department of Medical Epidemiology and Biostatistics, Karolinska Institutet, SE-171 77 Stockholm, Sweden)

  • Christina M. Hultman

    (Department of Medical Epidemiology and Biostatistics, Karolinska Institutet, SE-171 77 Stockholm, Sweden)

  • Paul Lichtenstein

    (Department of Medical Epidemiology and Biostatistics, Karolinska Institutet, SE-171 77 Stockholm, Sweden)

Abstract

This article reviews existing research at the intersection of genetics and economics, presents some new findings that illustrate the state of genoeconomics research, and surveys the prospects of this emerging field. Twin studies suggest that economic outcomes and preferences, once corrected for measurement error, appear to be about as heritable as many medical conditions and personality traits. Consistent with this pattern, we present new evidence on the heritability of permanent income and wealth. Turning to genetic association studies, we survey the main ways that the direct measurement of genetic variation across individuals is likely to contribute to economics, and we outline the challenges that have slowed progress in making these contributions. The most urgent problem facing researchers in this field is that most existing efforts to find associations between genetic variation and economic behavior are based on samples that are too small to ensure adequate statistical power. This has led to many false positives in the literature. We suggest a number of possible strategies to improve and remedy this problem: ( a) pooling data sets, ( b) using statistical techniques that exploit the greater information content of many genes considered jointly, and ( c) focusing on economically relevant traits that are most proximate to known biological mechanisms.

Suggested Citation

  • Daniel J. Benjamin & David Cesarini & Christopher F. Chabris & Edward L. Glaeser & David I. Laibson & Vilmundur Guðnason & Tamara B. Harris & Lenore J. Launer & Shaun Purcell & Albert Vernon Smith & M, 2012. "The Promises and Pitfalls of Genoeconomics," Annual Review of Economics, Annual Reviews, vol. 4(1), pages 627-662, July.
  • Handle: RePEc:anr:reveco:v:4:y:2012:p:627-662
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    File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev-economics-080511-110939
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    • Grankvist, Alexander & Benjamin, Daniel J. & Harris, Tamara B. & Launer, Lenore J. & Smith, Albert Vernon & Johannesson, Magnus & Atwood, Craig S. & Hebert, Benjamin Michael & Hultman, Christina M. & , 2012. "The Promises and Pitfalls of Genoeconomics," Scholarly Articles 10137000, Harvard University Department of Economics.

    Citations

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    Cited by:

    1. Maczulskij, Terhi, 2013. "Employment sector and pay gaps: Genetic and environmental influences," Labour Economics, Elsevier, vol. 23(C), pages 89-96.
    2. repec:wly:econjl:v:127:y:2017:i:604:p:2127-2152 is not listed on IDEAS
    3. De Neve, Jan-Emmanuel & Fowler, James H., 2014. "Credit card borrowing and the monoamine oxidase A (MAOA) gene," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PB), pages 428-439.
    4. Alexandre Belloni & Victor Chernozhukov & Denis Chetverikov & Christian Hansen & Kengo Kato, 2018. "High-dimensional econometrics and regularized GMM," CeMMAP working papers CWP35/18, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    5. Rietveld, Cornelius A. & Webbink, Dinand, 2016. "On the genetic bias of the quarter of birth instrument," Economics & Human Biology, Elsevier, vol. 21(C), pages 137-146.
    6. Eugenio Proto & Andrew J. Oswald, 2017. "National Happiness and Genetic Distance: A Cautious Exploration," Economic Journal, Royal Economic Society, vol. 127(604), pages 2127-2152, September.
    7. Koch, Alexander & Nafziger, Julia & Nielsen, Helena Skyt, 2015. "Behavioral economics of education," Journal of Economic Behavior & Organization, Elsevier, vol. 115(C), pages 3-17.
    8. Cronqvist, Henrik & Siegel, Stephan, 2014. "The genetics of investment biases," Journal of Financial Economics, Elsevier, vol. 113(2), pages 215-234.
    9. Loewen, Peter J. & Dawes, Christopher T. & Mazar, Nina & Johannesson, Magnus & Koellinger, Philipp & Magnusson, Patrik K.E., 2013. "The heritability of moral standards for everyday dishonesty," Journal of Economic Behavior & Organization, Elsevier, vol. 93(C), pages 363-366.
    10. repec:eee:intfin:v:52:y:2018:i:c:p:64-89 is not listed on IDEAS
    11. repec:eee:jhecon:v:60:y:2018:i:c:p:39-52 is not listed on IDEAS
    12. Cobb-Clark, Deborah A., 2016. "Biology and Gender in the Labor Market," IZA Discussion Papers 10386, Institute of Labor Economics (IZA).
    13. Eugenio Proto & Andrew J. Oswald, 2017. "National Happiness and Genetic Distance: A Cautious Exploration," Economic Journal, Royal Economic Society, vol. 127(604), pages 2127-2152, September.
    14. repec:spr:demogr:v:55:y:2018:i:4:d:10.1007_s13524-018-0696-1 is not listed on IDEAS

    More about this item

    Keywords

    genetics; heritability; GWAS;

    JEL classification:

    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • Z00 - Other Special Topics - - General - - - General

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