Work

Molecular Genetics, Risk Aversion, Return Perceptions, and Stock Market Participation

Year: 2020

Type: report

Abstract: We show that molecular variation in DNA related to cognition, personality, health, and body shape, predicts an individual's equity market participation and risk aversion.Moreover, the molecular genetic endowments predict individuals' return perceptions, most of which we find to be strikingly biased.The genetic endowments also strongly associate with many of the investor characteristics (e.g., trust, sociability, wealth) shown to explain heterogeneity in equity market participation.Our analysis helps elucidate why financial choices are heritable and how genetic endowments can help explain the links between financial choices, risk aversion, beliefs, and other variables known to explain stock market participation.

Source: National Bureau of Economic Research

DOI: 10.3386/w27638

Authors: Richard Sias, Laura Starks, Harry Turtle

Institutions: National Bureau of Economic Research, The University of Texas at Austin, Colorado State University

Language: English

Topic: Decision-Making and Behavioral Economics

Subfield: General Decision Sciences

Field: Decision Sciences

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W3047735675

Cites: 130

Cited by: 39

Related to: 10