Genetic Variation and Investment Choices
Existing literature in economics and finance has suggested biological and cultural factors as explanation to variation in risk-taking. In this project we aim to investigate whether variation in specific genes can explain variation in risk-taking among active investors. We will focus on genes related to the dopamine and serotonin systems, since these neurotransmitters have been linked to both economic risk-taking and risk-related activities. We will collect genetic information, registry-based data and experimental data from 1,000 individuals who are active investors, as well as from 500 individuals who will form a control group.
We will use Swedish registry-based data on wealth, broken down to the level of the specific securities. This information will enable us to construct measures of risk-taking with maximum relevance for economic theory. We will also measure risk preferences through behavioral experiments. This will allow us to investigate whether the specific genes correlate with experimental behavior and to what extent the experimental measures correlate with the portfolio measures.
Anna Dreber Almenberg, economics, Handelshögskolan, Stockholm
2010-2014
The aim of the project was to identify whether certain specific genes can predict variation in risk taking between different individuals. The existing literature in economics and finance suggests that both biological and cultural factors can explain variation in risk taking. This project explores to what extent variation in specific genes can predict variation in risk taking among active investors. We study variation in two genes: the dopamine receptor gene DRD and the serotonin transporter gene 5-HTTLPR. These genes have previously been linked to risk taking measured from experimental data. We therefore collected genetic information, registry data and experimental data from 150 active investors. So far we have not found any statistically significant relationship between either of the two genes and financial behavior, using experimental data and registry data.
We also had the aim to collect similar data from a control group, which we would compare with the group of active investors. After a recently published paper (Benjamin et al. 2012) showed that samples in this range are too small to provide meaningful results, we decided to end the data collection for a control group. A meaningful sample for such a control group would far exceed the scope of this project.
Benjamin DJ, Cesarini D, van der Loos MJHM, Dawes CT, Koellinger PD, et al. (2012) The genetic architecture of economic and political preferences. Proceedings of the National Academy of Sciences USA 109: 8026-8031.