Molecular Genetics, Risk Aversion, Return Perceptions, and Stock Market Participation / Richard Sias, Laura Starks, Harry J. Turtle.

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Sias, Richard

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Material type: Text

TextSeries: Working Paper Series (National Bureau of Economic Research) ; no. w27638.Publication details: Cambridge, Mass. National Bureau of Economic Research 2020.Description: 1 online resource: illustrations (black and white)Subject(s):

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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.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber w27638 (Browse shelf(Opens below))	Not For Loan

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August 2020.

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.