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Keywords:

  • twins;
  • genetics;
  • heritability;
  • economic risk preferences;
  • Minnesota Twin Registry

Abstract

We examine the influence of genetics on economic risk preferences by administering a measure of these preferences to monozygotic (MZ) (i.e., identical) and dizygotic (DZ) (i.e., non-identical) twin pairs. Our analysis supports a dominant genetic effect and virtually no additive genetic effect on economic risk preferences, with the heritability of preferences estimated at 0.63. These findings suggest that over half of the variation in such preferences can be explained by genetic factors, with the remainder of the variance explained by environmental influences not shared among sibling twins. We discuss the implications of our findings for the study of individual differences in economic risk preferences. Copyright © 2009 John Wiley & Sons, Ltd.