Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 679: Genetic Variation in Preferences for Giving and Risk-Taking

Cesarini David (), Christopher T. Dawes (), Magnus Johannesson (), Paul Lichtenstein () and Björn Wallace ()
Additional contact information
Cesarini David: Department of Economics, Massachusetts Institute of Technology, Postal: Massachusetts Institute of Technology, 50 Memorial Drive, Cambridge, MA 02142, USA
Christopher T. Dawes: Political Science Department, University of California, San Diego, Postal: University of California, San Diego, 9500 Gilman Drive 0521, La Jolla, CA 92093-0521, USA
Magnus Johannesson: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden
Paul Lichtenstein: Department of Medical Epidemiology and Biostatistics, Karolinska Institutet, Postal: Karolinska Institutet, Box 281, SE-171 77 Stockholm, Sweden
Björn Wallace: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden

Abstract: In this paper, we use the classical twin design to provide estimates of genetic and environmental influences on experimentally elicited preferences for risk and giving. Using standard methods from behavior genetics, we find strong prima facie evidence that these preferences are broadly heritable and our estimates suggest that genetic differences explain approximately twenty percent of individual variation. The results thus shed light on an important source of individual variation in preferences, a source which has hitherto largely been neglected in the economics literature.

Keywords: Genetics; Altruism; Risk Aversion; Preferences; Experiments

JEL-codes: C90; D01; D64

39 pages, First version: November 22, 2007. Revised: January 12, 2009. Earlier revisions: January 12, 2009.

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