Understanding the Correlation between Alzheimer’s Disease Polygenic Risk, Wealth, and the Composition of Wealth Holdings

41 Pages Posted: 24 Sep 2018 Last revised: 23 Jan 2019

See all articles by Su Hyun Shin

Su Hyun Shin

University of Alabama

Dean R. Lillard

Ohio State University (OSU) - Department of Human Sciences

Jay Bhattacharya

Stanford University - Center for Primary Care and Outcomes Research; National Bureau of Economic Research (NBER)

Date Written: September 21, 2018

Abstract

We investigate how genetic risk of developing Alzheimer's Disease (AD) relates to saving behavior. Using nationally representative data from the 1992-2014 Health and Retirement Study (HRS), we find that genetic predisposition for AD correlates with, but is not causally related to older individuals’ wealth holdings. People with higher Alzheimer’s Disease polygenic risk score (PGS) hold roughly 9 percent more wealth in CDs (hands-off assets) and around 11 percent, 15 percent, and 7 percent less wealth in stocks, IRAs, and other financial assets (hands-on assets) respectively. We explore three hypotheses that could explain these correlations. We hypothesize that people with high risk of AD choose different portfolios: (i) because they know their polygenic risk of developing Alzheimer’s Disease and related dementia, (ii) because they have lower cognitive capacity, and (iii) because the genome-wide association studies (GWAS) process that generated the Alzheimer’s Disease PGS failed to fully account for the aging process. Our extended model results show that the first two hypotheses do not account for the observed correlation. Consistent with the third hypothesis, the interaction between age and the Alzheimer’s Disease PGS does explain the correlation between genetic traits and asset holdings.

Keywords: Genetic risk, Polygenic score, Alzheimer’s Disease, Asset allocation, Wealth

JEL Classification: D1, D8, I12

Suggested Citation

Shin, Su Hyun and Lillard, Dean R. and Bhattacharya, Jayanta, Understanding the Correlation between Alzheimer’s Disease Polygenic Risk, Wealth, and the Composition of Wealth Holdings (September 21, 2018). 2019 Academic Research Colloquium for Financial Planning and Related Disciplines. Available at SSRN: https://ssrn.com/abstract=3253369 or http://dx.doi.org/10.2139/ssrn.3253369

Su Hyun Shin (Contact Author)

University of Alabama ( email )

Tuscaloosa, AL 35487-0158
United States

Dean R. Lillard

Ohio State University (OSU) - Department of Human Sciences ( email )

United States

Jayanta Bhattacharya

Stanford University - Center for Primary Care and Outcomes Research ( email )

Center for Health Policy
179 Encina Commons
Stanford, CA 94305-6019
United States
650-736-0404 (Phone)
650-723-1919 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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