The MAOA Gene Predicts Credit Card Debt

Abstract:     
Economists have long realized the importance of credit markets and borrowing behavior for household finance and economics more generally. However, none of this previous work has explored the role of biological constraints. Here we present the first evidence of a specific gene that may influence borrowing behavior. Using data from the National Longitudinal Study of Adolescent Health, we show that individuals with a polymorphism of the MAOA gene that has lower transcriptional efficiency are significantly more likely to report having credit card debt. Having one or both MAOA alleles of the low efficiency type raises the average likelihood of having credit card debt by 7.8% and 15.9% respectively. About half of our population has one or both MAOA alleles of the low type. The results suggest that economists should integrate innate propensities into economic models and consider the welfare consequences of possible discrimination by lenders on the basis of genotype.

Working Paper Series