The association between saving disposition and financial distress: A genetically informed approach

Alexandros Giannelis, Emily A Willoughby, Robin Corley, Christian Hopfer, John K. Hewitt, William G. Iacono, Jacob E Anderson, Aldo Rustichini, Scott I. Vrieze, Matt McGue, James J Lee

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

Saving disposition, the tendency to save rather than consume, has been found to be associated with economic outcomes. People lacking the disposition to save are more likely to experience financial distress. This association could be driven by other economic factors, behavioral traits, or even genetic effects. Using a sample of 3,920 American twins, we develop scales to measure saving disposition and financial distress. We find genetic influences on both traits, but also a large effect of the rearing family environment on saving disposition. We estimate that 44% of the covariance between the two traits is due to genetic effects. Saving disposition remains strongly associated with lower financial distress, even after controlling for family income, cognitive ability, and personality traits. The association persists within families and monozygotic twin pairs; the twin who saves more tends to be the twin who experiences less financial distress. This result suggest that there is a direct association between saving disposition and financial distress, although the direction of causation remains unclear.

Original languageEnglish (US)
Article number102610
JournalJournal of Economic Psychology
Volume96
DOIs
StatePublished - Jun 2023

Bibliographical note

Funding Information:
This work was supported by the National Institute on Drug Abuse, USA at the National Institutes of Health [ DA042755 , DA046413 , DA005147 , DA013240 , DA036216 , DA037904 , DA032555 , DA035804 , DA011015 , DA012845 , DA038065 ]; the National Institute on Alcohol Abuse and Alcoholism, USA at the National Institutes of Health [ AA009367 , AA023974 ]; and the National Institute of Mental Health, USA at the National Institutes of Health [ MH066140 ]. All authors read and approved the final manuscript.

Publisher Copyright:
© 2023 Elsevier B.V.

Keywords

  • Genetics
  • Income
  • Saving
  • Twins

PubMed: MeSH publication types

  • Journal Article

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