Intergenerational transfer of time and risk preferences.
Heather Brown1, Marjon van der Pol2
1Institute of Health and Society, Newcastle University, UK.
Journal of Economic Psychology
|September 29, 2015
Summary
Parental influence on offspring time and risk preferences is significant, with correlations varying by preference distribution and parent-child gender dynamics. These findings highlight the nuanced transmission of economic preferences across generations.
Area of Science:
- Behavioral Economics
- Family Studies
- Intergenerational Transmission
Background:
- Growing interest in understanding the formation of individual time and risk preferences.
- Limited knowledge regarding the mechanisms of preference formation, particularly parental influence.
- Hypothesis that parents transmit their time and risk preferences to their offspring.
Purpose of the Study:
- To examine the correlation between parental and offspring time and risk preferences.
- To explore variations in this correlation across preference distributions and parent-child dyads.
- To investigate potential gender differences in preference transmission.
Main Methods:
- Utilized data from the Household, Income and Labour Dynamics of Australia (HILDA) survey.
- Analyzed correlations in both time and risk preferences between parents and young adult offspring.
- Examined variations across preference distributions and four parent-child dyads (mother/daughter, mother/son, father/daughter, father/son).
Main Results:
- Significant relationships found between parental and offspring time and risk preferences.
- Correlation strength varied across the distribution of time preferences, peaking at longer planning horizons.
- Risk-averse parents tended to have risk-averse children; risk-seeking parents had risk-seeking offspring (except father/daughter dyad).
- Maternal influence on time preferences was stronger than paternal influence.
- Daughters were more influenced by maternal risk preferences, while sons were influenced by both parents.
Conclusions:
- Parental transmission of time and risk preferences to offspring is evident and significant.
- Preference transmission is nuanced, influenced by factors such as planning horizon and parental gender.
- Parental gender plays a crucial role in the dynamics of intergenerational preference correlation.
Keywords:
AustraliaGeneralised ordered probitIntergenerational transferRisk preferenceTime preferencesMore Related Videos
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