Heritability of Time Preference: Evidence from German Twin Data

Abstract

SUMMARY In economics, time preferences are highly relevant for a person's intertemporal choices. Individual time discounting is associated with a number of lifetime outcomes and behavior patterns such as educational attainment, personal income, savings, smoking, alcohol consumption, and obesity. Regarding the intergenerational transmission of economic preferences, previous findings suggest a positive correlation between parental and offspring time preference. However, there is still limited empirical evidence about the role of genetics in the process of preference formation. The classical twin methodology is applied to estimate the genetic variation in individual time preference. Information on monozygotic and dizygotic twins allows us to disentangle the influences of genetic and environmental factors on time preference. Novel data on roughly 3,000 twins from the German TwinLife project are used. We rely on an experimentally validated survey measure of time discounting, namely, self‐assessed patience. According to our best‐fitting polygenic model, we find that differences in genetics explain about 23 percent of the total variation in patience across individuals. The results suggest that genes are a considerable source of individual variation in time preference.

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