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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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    • 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. 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.
    3. Brunello, Giorgio & Sanz-de-Galdeano, Anna & Terskaya, Anastasia, 2020. "Not only in my genes: The effects of peers’ genotype on obesity," Journal of Health Economics, Elsevier, vol. 72(C).
    4. 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.
    5. Matthijs J H M van der Loos & Cornelius A Rietveld & Niina Eklund & Philipp D Koellinger & Fernando Rivadeneira & Gonçalo R Abecasis & Georgina A Ankra-Badu & Sebastian E Baumeister & Daniel J Benjami, 2013. "The Molecular Genetic Architecture of Self-Employment," PLOS ONE, Public Library of Science, vol. 8(4), pages 1-15, April.
    6. 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.
    7. Cronqvist, Henrik & Siegel, Stephan, 2014. "The genetics of investment biases," Journal of Financial Economics, Elsevier, vol. 113(2), pages 215-234.
    8. Felix C.H. Gottschalk, 2019. "Why prevent when it does not pay? Prevention when health services are credence goods," Health Economics, John Wiley & Sons, Ltd., vol. 28(5), pages 693-709, May.
    9. Cobb-Clark, Deborah A., 2016. "Biology and Gender in the Labor Market," IZA Discussion Papers 10386, Institute of Labor Economics (IZA).
    10. Lauren Gaydosh & Daniel W. Belsky & Benjamin W. Domingue & Jason D. Boardman & Kathleen Mullan Harris, 2018. "Father Absence and Accelerated Reproductive Development in Non-Hispanic White Women in the United States," Demography, Springer;Population Association of America (PAA), vol. 55(4), pages 1245-1267, August.
    11. Sanz-de-Galdeano, Anna & Terskaya, Anastasia & Upegui, Angie, 2020. "Association of a Genetic Risk Score with BMI along the Life-Cycle: Evidence from Several US Cohorts," IZA Discussion Papers 13671, Institute of Labor Economics (IZA).
    12. Nuñez, Roy, 2020. "Obesity and labor market in Peru," MPRA Paper 105621, University Library of Munich, Germany.
    13. N. Gregory Mankiw, 2013. "Defending the One Percent," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 21-34, Summer.
    14. Cornelius A. Rietveld & Pankaj C. Patel, 2019. "ADHD and later-life labor market outcomes in the United States," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(7), pages 949-967, September.
    15. Hyeokmoon Kweon & Casper A.P. Burik & Richard Karlsson Linner & Ronald de Vlaming & Aysu Okbay & Daphne Martschenko & Kathryn Paige Harden & Thomas A. DiPrete & Philipp D. Koellinger, 2020. "Genetic Fortune: Winning or Losing Education, Income, and Health," Tinbergen Institute Discussion Papers 20-053/V, Tinbergen Institute, revised 01 Dec 2020.
    16. 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.
    17. Koch, Alexander & Nafziger, Julia & Nielsen, Helena Skyt, 2015. "Behavioral economics of education," Journal of Economic Behavior & Organization, Elsevier, vol. 115(C), pages 3-17.
    18. AMENDOLA, Adalgiso & DELL'ANNO, Roberto & PARISI, Lavinia, 2020. "Why Some People Are Not As Happy As They Could Be: The Role of Unobservable Subjective Factors," CELPE Discussion Papers 162, CELPE - Centre of Labour Economics and Economic Policy, University of Salerno, Italy.
    19. 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.
    20. Cardella, Eric & Kalcheva, Ivalina & Shang, Danjue, 2018. "Financial markets and genetic variation," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 52(C), pages 64-89.
    21. Lång, Elisabeth & Nystedt, Paul, 2018. "Blowing up money? The earnings penalty of smoking in the 1970s and the 21st century," Journal of Health Economics, Elsevier, vol. 60(C), pages 39-52.
    22. Su H. Shin & Dean R. Lillard & Jay Bhattacharya, 2019. "Understanding the Correlation between Alzheimer’s Disease Polygenic Risk, Wealth, and the Composition of Wealth Holdings," NBER Working Papers 25526, National Bureau of Economic Research, Inc.
    23. Owen Thompson, 2017. "Gene–Environment Interaction in the Intergenerational Transmission of Asthma," Health Economics, John Wiley & Sons, Ltd., vol. 26(11), pages 1337-1352, November.
    24. Amitabh Chandra & Courtney Coile & Corina Mommaerts, 2020. "What Can Economics Say About Alzheimer's Disease?," NBER Working Papers 27760, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    genetics; heritability; GWAS;
    All these keywords.

    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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