Adversity Magnifies Genetic Influence on Savings Behavior

48 Pages Posted: 9 May 2024

See all articles by Wenchao Li

Wenchao Li

Tongji University

Junjian Yi

Peking University

Junsen Zhang

The Chinese University of Hong Kong (CUHK) - Department of Economics

Date Written: May 8, 2024

Abstract

This paper studies how adversity alters the role of genes in determining savings behavior. The identification is based on genetic similarity between twins, which differs by whether they are monozygotic or dizygotic, combined with a unique policy “experiment” in China, which unexpectedly exposed affected youths to adversity. Using Chinese urban twins data, estimates reveal that adolescent exposure to adverse circumstances magnifies the influence of genes: individuals affected by the policy exhibit a stronger genetic predisposition towards saving compared to unaffected individuals. Our finding helps understand how genes and external environment shape individual decision-making, by their own and by their interplay.

Keywords: Savings behavior, Gene-environment interaction, Adversity, Twins study, Individual decision-making

JEL Classification: D14, D87, G51, J62

Suggested Citation

Li, Wenchao and Yi, Junjian and Zhang, Junsen, Adversity Magnifies Genetic Influence on Savings Behavior (May 8, 2024). Available at SSRN: https://ssrn.com/abstract=4821061 or http://dx.doi.org/10.2139/ssrn.4821061

Wenchao Li (Contact Author)

Tongji University ( email )

1239 Siping Road
Shanghai, 200092
China

Junjian Yi

Peking University ( email )

National School of Development
Peking University
Beijing, Beijing 100871
China

HOME PAGE: http://https://en.nsd.pku.edu.cn/faculty/fulltime/y/520194.htm

Junsen Zhang

The Chinese University of Hong Kong (CUHK) - Department of Economics ( email )

Shatin, N.T.
Hong Kong

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