Working Papers, Department of Economics, Lund University
Sandra E. Black
On The Origins of Risk-Taking
(), Paul J. Devereux
(), Petter Lundborg
() and Kaveh Majlesi
Abstract: Risk-taking behavior is highly correlated between parents
and their children; however, little is known about the extent to which
these relationships are genetic or determined by environmental factors. We
use data on stock market participation of Swedish adoptees and relate this
to the investment behavior of both their biological and adoptive parents.
We find that stock market participation of parents increases that of
children by about 34% and that both pre-birth and post-birth factors are
important. However, once we condition on having positive financial wealth,
we find that nurture has a much stronger influence on risk-taking by
children, and the evidence of a relationship between stock-holding of
biological parents and their adoptive children becomes very weak. We find
similar results when we study the share of financial wealth that is
invested in stocks. This suggests that a substantial proportion of
risk-attitudes and behavior is environmentally determined.
Keywords: Nature-Nurture; Risk-taking; Portfolio choice; Investment behavior; (follow links to similar papers)
JEL-Codes: G11; J01; (follow links to similar papers)
44 pages, June 20, 2015
Before downloading any of the electronic versions below
you should read our statement on
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
Questions (including download problems) about the papers in this series should be directed to David Edgerton ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Design by Joachim Ekebom