Parental Socialization Effort and the Intergenerational Transmission of Risk Preferences

30 Pages Posted: 18 Feb 2015 Last revised: 20 Feb 2015

See all articles by Sule Alan

Sule Alan

University of Essex - Department of Economics

Nazli Baydar

Koc University

Teodora Boneva

University College London - Department of Economics

Seda Ertac

Koc University

Thomas F. Crossley

European University Institute - Economics Department (ECO); Institute for Fiscal Studies

Date Written: September 2014

Abstract

We study the transmission of risk attitudes in a unique survey of mothers and children in which both participated in an incentivized risk preference elicitation task. We document that risk preferences are correlated between mothers and children when the children are just 7 to 8 years old. This correlation is only present for daughters. We show that a measure of parental involvement is a strong moderator of the association between mothers’ and daughters’ risk tolerance. These findings support a role for socialization in the intergenerational transmission of preferences that predict economic behaviour.

Keywords: risk preferences, intergenerational transmission, children's economic decisions, field experiments

JEL Classification: C93, J16, D03

Suggested Citation

Alan, Sule and Baydar, Nazli and Boneva, Teodora and Ertac, Seda and Crossley, Thomas F., Parental Socialization Effort and the Intergenerational Transmission of Risk Preferences (September 2014). Available at SSRN: https://ssrn.com/abstract=2566409 or http://dx.doi.org/10.2139/ssrn.2566409

Sule Alan (Contact Author)

University of Essex - Department of Economics ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Nazli Baydar

Koc University ( email )

Rumelifeneri Yolu
34450 Sar?yer
Istanbul, 34450
Turkey

Teodora Boneva

University College London - Department of Economics ( email )

Drayton House
30 Gordon Street
London, WC1H 0AX
United Kingdom

Seda Ertac

Koc University ( email )

Rumelifeneri Yolu
34450 Sar?yer
Istanbul, 34450
Turkey

Thomas F. Crossley

European University Institute - Economics Department (ECO) ( email )

Villa San Paolo
Via della Piazzuola 43
50133 Florence
Italy

Institute for Fiscal Studies ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

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