Genetic Variation in Financial Decision Making
53 Pages Posted: 9 Oct 2009
Date Written: October 7, 2009
Abstract
Individuals differ in how they compose their investment portfolios, yet empirical models of portfolio risk typically only account for a small portion of the cross-sectional variance. This paper asks if genetic variation can explain some of these individual differences. Following a major pension reform Swedish adults had to compose a portfolio from a large menu of funds. We match data on these investment decisions with the Swedish Twin Registry and find that approximately 25% of individual variation in portfolio risk is due to genetic variation. We also show that these results extend to several other aspects of financial decision-making.
Keywords: investor heterogeneity, portfolio risk, genetics, twins
JEL Classification: D14, G11
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Neural Basis of Financial Risk Taking
By Camelia M. Kuhnen and Brian Knutson
-
Genetic Determinants of Financial Risk Taking
By Camelia M. Kuhnen and Joan Y. Chiao
-
Nucleus Accumbens Activation Mediates the Influence of Reward Cues on Financial Risk-Taking
By Brian Knutson, G. Elliott Wimmer, ...
-
Childhood Determinants of Risk Aversion: The Long Shadow of Compulsory Education
By Dmytro Hryshko, María José Luengo‐prado, ...
-
Anticipation of Monetary Gain but Not Loss in Healthy Older Adults
-
Focusing on Desirability: The Effect of Decision Interruption and Suspension on Preferences
By Wendy Liu
-
Credit Card Borrowing and the Monoamine Oxidase A (MAOA) Gene
-
Individual Differences in Insular Sensitivity During Loss Anticipation Predict Avoidance Learning
-
Born to Lead? A Twin Design and Genetic Association Study of Leadership Role Occupancy
By Jan‐emmanuel De Neve, Slava Mikhaylov, ...