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

  • 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)

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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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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  1. 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.
  2. Holger Bonin & Amelie Constant & Konstantinos Tatsiramos & Klaus Zimmermann, 2009. "Native-migrant differences in risk attitudes," Applied Economics Letters, Taylor & Francis Journals, vol. 16(15), pages 1581-1586.
  3. Xiaohao Ding & Joop Hartog & Yuze Sun, 2010. "Can we measure Individual Risk Attitudes in a Survey?," Tinbergen Institute Discussion Papers 10-027/3, Tinbergen Institute.
  4. Dorothe Bonjour & Lynn Cherkas & Jonathan Haskel & Denise Hawkes & Tim Spector, 2002. "Returns to Education: Evidence from UK Twins," CEE Discussion Papers 0022, Centre for the Economics of Education, LSE.
  5. 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.
  6. David, Cesarini & Dawes, Christopher T. & Johannesson, Magnus & Lichtenstein, Paul & Wallace, Björn, 2007. "Genetic Variation in Preferences for Giving and Risk-Taking," SSE/EFI Working Paper Series in Economics and Finance 679, Stockholm School of Economics, revised 12 Jan 2009.
  7. Powell, Melanie & Ansic, David, 1997. "Gender differences in risk behaviour in financial decision-making: An experimental analysis," Journal of Economic Psychology, Elsevier, vol. 18(6), pages 605-628, November.
  8. Falk, Armin & Heckman, James J., 2009. "Lab Experiments Are a Major Source of Knowledge in the Social Sciences," IZA Discussion Papers 4540, Institute for the Study of Labor (IZA).
  9. Anh T. Le & Paul W. Miller & Andrew C. Heath & Nick Martin, 2004. "Early Childhood Behaviours, Schooling and Labour Market Outcomes: Estimates from a Sample of Twins," Economics Discussion / Working Papers 04-02, The University of Western Australia, Department of Economics.
  10. Dohmen, Thomas & Falk, Armin & Huffman, David B. & Sunde, Uwe & Schupp, Jürgen & Wagner, Gert G., 2005. "Individual Risk Attitudes: New Evidence from a Large, Representative, Experimentally-Validated Survey," IZA Discussion Papers 1730, Institute for the Study of Labor (IZA).
  11. Renate Schubert, 1999. "Financial Decision-Making: Are Women Really More Risk-Averse?," American Economic Review, American Economic Association, vol. 89(2), pages 381-385, May.
  12. 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, vol. 85(3), pages 586-99, June.
  13. Miller, Paul & Mulvey, Charles & Martin, Nick, 2006. "The return to schooling: Estimates from a sample of young Australian twins," Labour Economics, Elsevier, vol. 13(5), pages 571-587, October.
  14. Miller, Paul & Mulvey, Charles & Martin, Nick, 2005. "Birth weight and schooling and earnings: estimates from a sample of twins," Economics Letters, Elsevier, vol. 86(3), pages 387-392, March.
  15. 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.
  16. Catherine C. Eckel & Philip J. Grossman, 2002. "Sex Differences and Statistical Stereotyping in Attitudes Toward Financial Risk," Monash Economics Working Papers archive-03, Monash University, Department of Economics.
  17. Hartog, Joop & Ferrer-i-Carbonell, Ada & Jonker, Nicole, 2002. "Linking Measured Risk Aversion to Individual Characteristics," Kyklos, Wiley Blackwell, vol. 55(1), pages 3-26.
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