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Lookup NU author(s): Dr Heather BrownORCiD
This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0).
There is a growing interest in individual time and risk preferences. Little is known about how these preferences are formed. It is hypothesised that parents may transmit their preferences to their offspring. This paper examines the correlation in offspring and parental time and risk preferences using data from an annual household survey in Australia (the HILDA survey). Both time and risk preferences are examined and we explored whether the correlation in time and risk preferences varies across the distribution of preferences and across the across the four parent-child dyads (mother/daughter, mother/son, father/daughter, father/son). The results show that there is a significant relationship between parents and their young adult offspring risk and time preference measures. The correlation varies across the distribution of time preferences. The correlation was largest for longer planning horizons. Risk averse parents are more likely to have risk averse children. Except for the father/daughter dyad risk seeking parents are more likely to have risk seeking offspring. Some gender differences were found. The association in parental and offspring time preference was larger for mothers than fathers. Daughters are more likely to be influenced by their mother’s risk preferences, however, sons are equally influenced by both parents. The results of this study suggest that the transmission in preferences is more nuanced than previously thought and parental gender may be important.
Author(s): Brown H, van der Pol M
Publication type: Article
Publication status: Published
Journal: Journal of Economic Psychology
Year: 2015
Volume: 49
Pages: 187-204
Print publication date: 01/08/2015
Online publication date: 12/06/2015
Acceptance date: 03/06/2015
Date deposited: 03/06/2015
ISSN (print): 0167-4870
ISSN (electronic): 1872-7719
Publisher: Elsevier BV
URL: http://dx.doi.org/10.1016/j.joep.2015.06.003
DOI: 10.1016/j.joep.2015.06.003
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