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Is Greed in the Genes?

   by Bryan Caplan / located here (PERMANENT LINK:) econlog.econlib.org/archives/2009/03/is_greed_in_the.html#
from: MARCH 9, 2009

All the following is quotation:

Behavioral geneticists will tell you that intelligence and personality are highly heritable. But at least for economists, intelligence and personality are mainly interesting insofar as they predict that variable that "really" counts - income. How heritable is that?

Quite. This 2002 paper by Bowles and Gintis reports that identical twins' incomes have a correlation of .56, versus .36 for fraternal twins. Using standard formulae, this implies that genes explains 40 % of the variance of income, family environment 16%, and non-shared environment 44%. A recent working paper by David Cesarini gets income correlations of .545 for identicals versus .266 for fraternals, implying that genes explain 56% of the variance, shared environment -1%, and non-shared environment 45%.

It's easy at this point to say, "Of course! Intelligence has a large effect on income and is highly heritable, so it follows that income will be highly heritable, too." But Bowles and Gintis show that the heritability of income is far larger than the IQ effect can explain. (See Arnold's doubts here).

What if you add in personality measures? David Cesarini does just this - and finds that measures of IQ and personality explain a bit more than one-third of the heritaibility of income. That's a lot more than B&G got, but the glass is still two-thirds empty.

So where are the other two-thirds of the income heritability coming from? Here's an hypothesis that seems promising to me:

1. Standard personality tests largely neglect the personality trait of greediness. (Alternate labels: Orientation toward money, materialism...)

2. Greediness is moderately-strongly heritable.

3. Greediness strongly predicts income, all else equal.

Take me, for instance. IQ tests say I'm smart, and personality tests say I'm conscientious. But money doesn't matter much to me. When someone leaves academia to earn five times the income, I don't feel envious; I feel relieved not be to leaving academia! The end result: While I'm financially comfortable, I earn a lot less than many people with similar intelligence and work ethic.

So what do you think? If measured intelligence and conscientiousness account for one-third of the heritability of income, how much could measured greediness explain?


Link (same net address)

TrackBack URL: http://econlog.econlib.org/mt/mt-tb.cgi/1589

The author at CORRUPT.org: Remaking Modern Society in a related article titled Will I Become An Economic Hotshot? writes:

Bryan Caplan educates us in the fine art of biological determinism and economics: Behavioral geneticists will tell you that intelligence and personality are highly heritable. But at least for economists, intelligence and personality are mainly interesti [Tracked on March 11, 2009 7:00 AM]


Comments (same net address)

(only 1 comment quoted here:) Dennis Mangan writes:
I think it makes a lot of sense. In the book "The Millionaire Next Door", the authors state that the millionaires they studied had one thing in common: a constant awareness of money, how to make it, and how to keep it. They looked at every decision in their lives as to how it would affect them financially. So they had a strong "orientation toward money". Posted March 9, 2009 2:27 PM