Thursday, September 25, 2008

Altruism and Risk-Taking: Kinda Heritable   posted by Herrick @ 9/25/2008 03:08:00 PM

Economists are getting into the twin-study game more often. The latest entry is forthcoming in the Harvard-MIT run Quarterly Journal of Economics. They ran tests on a bunch of Swedish twins, tests that involved real money. The goal: See how altruistic they were (how much money did they share with a pro-homeless charity?) and see how risk-tolerant they were (how big does the reward have to be before they'd take a risky gamble?).

Key quote:
[W]e have used standard behavior genetic techniques to decompose variation in preferences for giving and risk-taking into environmental and genetic components. We document a significant genetic effect on risk taking and giving, with genes explaining approximately 20% of phenotypic variation in the best fitting models. The estimated effect of common environment, by contrast, is smaller.

So E>A>C, a common result. Since economists have spent a fair amount of time arguing for the social construction of preferences, it's good to have some evidence that shared family environment--presumably one important kind of "social construction"--apparently has only a modest association with routine economic preferences.

Note: This is the same group of researchers that found that 40% of "responder" behavior in an ultimatum game was heritable.

Conclusions: 1. The Swedish Twin Registry is a treasure. 2. Responder behavior (basically, willingness to punish even when it's expensive to punish) seems about twice as heritable as risk-taking and altruism. We're only going on two studies here, but that's an interesting result: Perhaps "Desire for justice/revenge" is more heritable than "Fear of loss" and "Kindness."