Economics Research Seminar Series: Nathan Kettlewell

Using a novel empirical approach that combines methodologies from behavioral genetics and structural econometrics, we provide estimates of the heritability of risk, time, and ambiguity preferences in a lab-in-the field experiment with 1,120 twins in Australia. Our study extends previous measurement approaches by (1) using salient incentives, (2) jointly eliciting the three aspects of economic preferences for the same individual, (3) employing front-end delays to capture non-stationary time preferences, and (4) quantifying heritability in deep preference parameters instead of common behavioral proxies.  We find that our structural model that explicitly accounts for underlying economic theory and decision errors yields estimates of heritability which are generally greater than what previous twin studies have reported. These estimates are also greater than what we find when we apply conventional behavioral genetic models to our own data.