The Promises and Pitfalls of Genoeconomics

Posted: 31 Mar 2013

See all articles by Daniel J. Benjamin

Daniel J. Benjamin

USC, Center for Economic and Social Research (CESR); National Bureau of Economic Research (NBER)

David Cesarini

New York University (NYU); IFN

Christopher F. Chabris

Harvard University - Department of Psychology

Edward L. Glaeser

Harvard University - Department of Economics; Brookings Institution; National Bureau of Economic Research (NBER)

David Laibson

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Vilmundur Guðnason

Icelandic Heart Association

Tamara Harris

Government of the United States of America - Laboratory of Epidemiology, Demography, and Biometry

Lenore Launer

Government of the United States of America - Laboratory of Epidemiology, Demography, and Biometry

Shaun Purcell

Massachusetts General Hospital - Center for Human Genetics Research

Albert Smith

Icelandic Heart Association

Magnus Johannesson

Stockholm School of Economics - Department of Economics

Patrik Magnusson

Karolinska Institutet - Department of Medical Epidemiology and Biostatistics

Jonathan Beauchamp

McKinsey Consulting Group

Nicholas A. Christakis

Yale University, Law School, Students

Craig Atwood

University of Wisconsin - Madison - Department of Medicine

Benjamin Hebert

Stanford University

Jeremy Freese

Northwestern University

Robert M. Hauser

University of Wisconsin - Madison - Department of Sociology

Taissa Hauser

University of Wisconsin - Madison - Department of Sociology

Alexander Grankvist

Karolinska Institutet - Department of Medical Epidemiology and Biostatistics

Christina Hultman

Karolinska Institutet - Department of Medical Epidemiology and Biostatistics

Paul Lichtenstein

Karolinska Institutet - Department of Medical Epidemiology and Biostatistics

Date Written: July 2012

Abstract

This article reviews existing research at the intersection of genetics and economics, presents some new findings that illustrate the state of genoeconomics research, and surveys the prospects of this emerging field. Twin studies suggest that economic outcomes and preferences, once corrected for measurement error, appear to be about as heritable as many medical conditions and personality traits. Consistent with this pattern, we present new evidence on the heritability of permanent income and wealth. Turning to genetic association studies, we survey the main ways that the direct measurement of genetic variation across individuals is likely to contribute to economics, and we outline the challenges that have slowed progress in making these contributions. The most urgent problem facing researchers in this field is that most existing efforts to find associations between genetic variation and economic behavior are based on samples that are too small to ensure adequate statistical power. This has led to many false positives in the literature. We suggest a number of possible strategies to improve and remedy this problem: (a) pooling data sets, (b) using statistical techniques that exploit the greater information content of many genes jointly, and (c) focusing on economically relevant traits that are most proximate to known biological mechanisms.

Suggested Citation

Benjamin, Daniel J. and Cesarini, David and Chabris, Christopher F. and Glaeser, Edward L. and Laibson, David I. and Guðnason, Vilmundur and Harris, Tamara and Launer, Lenore and Purcell, Shaun and Smith, Albert and Johannesson, Magnus and Magnusson, Patrik and Beauchamp, Jonathan and Christakis, Nicholas A. and Atwood, Craig and Hebert, Benjamin M. and Freese, Jeremy and Hauser, Robert M. and Hauser, Taissa and Grankvist, Alexander and Hultman, Christina and Lichtenstein, Paul, The Promises and Pitfalls of Genoeconomics (July 2012). Annual Review of Economics, Vol. 4, pp. 627-662, 2012. Available at SSRN: https://ssrn.com/abstract=2139251 or http://dx.doi.org/10.1146/annurev-economics-080511-110939

Daniel J. Benjamin (Contact Author)

USC, Center for Economic and Social Research (CESR) ( email )

635 Downey Way
Los Angeles, CA 90089-3332
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
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David Cesarini

New York University (NYU) ( email )

19 W 4th Street
6FL
New York, NY 10012
United States

IFN ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Christopher F. Chabris

Harvard University - Department of Psychology ( email )

33 Kirkland Street
Cambridge, MA 02138
United States

HOME PAGE: http://www.wjh.harvard.edu/~cfc

Edward L. Glaeser

Harvard University - Department of Economics ( email )

Littauer Center
Room 315A
Cambridge, MA 02138
United States
617-496-2150 (Phone)
617-496-1722 (Fax)

Brookings Institution

1775 Massachusetts Ave. NW
Washington, DC 20036-2188
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David I. Laibson

Harvard University - Department of Economics ( email )

Littauer Center
Room M-14
Cambridge, MA 02138
United States
617-496-3402 (Phone)
617-495-8570 (Fax)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Vilmundur Guðnason

Icelandic Heart Association ( email )

Hjartavernd / Holtasmára 1
201 Kópavogur
Iceland
+ 354 535 18 00 (Phone)

Tamara Harris

Government of the United States of America - Laboratory of Epidemiology, Demography, and Biometry

251 Bayview Boulevard, Suite 100
Baltimore, MD 21224-6825
United States

Lenore Launer

Government of the United States of America - Laboratory of Epidemiology, Demography, and Biometry

251 Bayview Boulevard, Suite 100
Baltimore, MD 21224-6825
United States

Shaun Purcell

Massachusetts General Hospital - Center for Human Genetics Research

55 Fruit Street
Boston, MA 02114
United States

Albert Smith

Icelandic Heart Association

Hjartavernd / Holtasmára 1
201 Kópavogur
Iceland

Magnus Johannesson

Stockholm School of Economics - Department of Economics ( email )

P.O. Box 6501
Sveavagen 65
S-113 83 Stockholm
Sweden

Patrik Magnusson

Karolinska Institutet - Department of Medical Epidemiology and Biostatistics ( email )

SE-171 82 Solna
Sweden

Jonathan Beauchamp

McKinsey Consulting Group

Washington, DC
United States

Nicholas A. Christakis

Yale University, Law School, Students ( email )

127 Wall Street
New Haven, CT 06511
United States

Craig Atwood

University of Wisconsin - Madison - Department of Medicine

716 Langdon Street
Madison, WI 53706-1481
United States

Benjamin M. Hebert

Stanford University ( email )

Stanford, CA 94305
United States

Jeremy Freese

Northwestern University ( email )

2001 Sheridan Road
Evanston, IL 60208
United States

Robert M. Hauser

University of Wisconsin - Madison - Department of Sociology ( email )

Madison, WI 53706
United States

Taissa Hauser

University of Wisconsin - Madison - Department of Sociology ( email )

Madison, WI 53706
United States

Alexander Grankvist

Karolinska Institutet - Department of Medical Epidemiology and Biostatistics

SE-171 82 Solna
Sweden

Christina Hultman

Karolinska Institutet - Department of Medical Epidemiology and Biostatistics

SE-171 82 Solna
Sweden

Paul Lichtenstein

Karolinska Institutet - Department of Medical Epidemiology and Biostatistics ( email )

SE-171 82 Solna
Sweden

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