@article{3ffc344e2fd147fca4d11e65ae8744e5,
title = "On the origins of risk-taking in financial markets",
abstract = "Financial investment behavior is highly correlated between parents and their children. Using Swedish data, we find that the decision of adoptees to hold equities is associated with the behavior of both biological and adoptive parents, implying a role for both genetic and environmental influences. However, we find that nurture has a stronger influence on the share of financial assets invested in equities and on portfolio volatility, suggesting that financial risk-taking is substantially environmentally determined. The parental investment variables substantially increase the explanatory power of cross-sectional regressions and so may play an important role in understanding cross-sectional heterogeneity in investment behavior.",
author = "Black, {Sandra E.} and Devereux, {Paul J.} and Petter Lundborg and Kaveh Majlesi",
note = "Funding Information: Moving beyond whether the individual participates in the equity market, we also study two measures of portfolio riskiness for participators—the risky share and portfolio volatility. To construct the latter variable, we follow Calvet, Campbell, and Sodini (2007) and use the monthly price history of individual stocks and mutual funds to calculate the variance-covariance matrix of each asset and in turn the standard deviation of individual portfolios at the end of each year. We obtain asset prices from a number of sources, including Data stream, Bloomberg, SIX Financial Information, Swedish House of Finance, and the Swedish Investment Fund Association (FondBolagens F{\"o}rening). Details on the construction of this measure are in the Internet Appendix. Publisher Copyright: {\textcopyright} 2017 the American Finance Association",
year = "2017",
month = oct,
doi = "10.1111/jofi.12521",
language = "English",
volume = "72",
pages = "2229--2278",
journal = "Journal of Finance",
issn = "0022-1082",
publisher = "Wiley-Blackwell",
number = "5",
}