Genetic and environmental influences on household financial distress

Citation

Xu, Yilan; Briley, Daniel A.; Brown, Jeffrey R.; & Roberts, Brent W. (2017). Genetic and environmental influences on household financial distress. Journal of Economic Behavior & Organization. vol. 142 (Supplement C) pp. 404-424

Abstract

Heterogeneity of household financial outcomes emerges from various individual and environmental factors, including personality, cognitive ability, and socioeconomic status (SES), among others. Using a genetically informative data set, we decompose the variation in financial management behavior into genetic, shared environmental and non-shared environmental factors. We find that about half of the variation in financial distress is genetically influenced, and personality and cognitive ability are associated with financial distress through genetic and within-family pathways. Moreover, genetic influences of financial distress are highest at the extremes of SES, which in part can be explained by neuroticism and cognitive ability being more important predictors of financial distress at low and high levels of SES, respectively.

URL

https://doi.org/10.1016/j.jebo.2017.08.001

Keyword(s)

Household finance Personality traits Cognitive ability Socioeconomic status Behavior genetics

Reference Type

Journal Article

Journal Title

Journal of Economic Behavior & Organization

Author(s)

Xu, Yilan
Briley, Daniel A.
Brown, Jeffrey R.
Roberts, Brent W.

Year Published

2017

Volume Number

142

Issue Number

Supplement C

Pages

404-424

Edition

August 10, 2017

DOI

10.1016/j.jebo.2017.08.001

Reference ID

8252