New WSJ Post: On the origins of risk taking

/New WSJ Post: On the origins of risk taking

New WSJ Post: On the origins of risk taking

By | 2017-08-18T16:59:50+00:00 April 4th, 2016|Uncategorized|2 Comments

We did a summary post for the Wall Street Journal on an interesting new paper related to risk taking and your environment.

Here is a link to the original paper and the abstract if you want to dig in more.

On the Origins of Risk-Taking

Risk-taking behavior is highly correlated between parents and their children; however, little is known about the extent to which these relationships are genetic or determined by environmental factors. We use data on stock market participation of Swedish adoptees and relate this to the investment behavior of both their biological and adoptive parents. We find that stock market participation of parents increases that of children by about 34% and that both pre-birth and post-birth factors are important. However, once we condition on having positive financial wealth, we find that nurture has a much stronger influence on risk-taking by children, and the evidence of a relationship between stock-holding of biological parents and their adoptive children becomes very weak. We find similar results when we study the share of financial wealth that is invested in stocks. This suggests that a substantial proportion of risk-attitudes and behavior is environmentally determined.

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About the Author:

Wes Gray
After serving as a Captain in the United States Marine Corps, Dr. Gray earned a PhD, and worked as a finance professor at Drexel University. Dr. Gray’s interest in bridging the research gap between academia and industry led him to found Alpha Architect, an asset management that delivers affordable active exposures for tax-sensitive investors. Dr. Gray has published four books and a number of academic articles. Wes is a regular contributor to multiple industry outlets, to include the following: Wall Street Journal, Forbes,, and the CFA Institute. Dr. Gray earned an MBA and a PhD in finance from the University of Chicago and graduated magna cum laude with a BS from The Wharton School of the University of Pennsylvania.


  1. John Henry April 5, 2016 at 1:39 pm

    non gated link to original paper

    • Wesley Gray, PhD
      Wesley Gray, PhD April 5, 2016 at 6:18 pm

      thx! I have access to NBER…forgot about their paywall!

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