Intergenerational transmission of risk attitudes in Burkina Faso

Abstract

Previous research shows that transmission of attitudes in the family is gendered. However, there are limited findings about intergenerational transmission of risk attitudes and whether it is gendered. This study replicates the findings by Dohmen et al. (Rev Econ Stud 79(2):645-677) for Germany by using quantitative data from Burkina Faso in 2014 to analyze three different self-reported risk questions. Our results show a strong intergenerational transmission of attitudes from parents to children in which positive assortative mating strengthens the parents' transmission of attitudes to her child. Mothers' transmissions are stronger for their daughters than sons. For fathers, the pattern is inverted. Our findings also show the existence of heterogeneity in intergenerational transmission within a male-and female-dominated risk domain. This supports the gender-specific role model hypothesis. Furthermore, we find support for the transmission of attitudes from the local environment to the child, but the strength and significance of this transmission decrease when controlling for parents' attitudes.

Gender, risk preferences and willingness to compete in a random sample of the Swedish population✰

“…Falk et al (2017) study random samples of households in 76 countries and find women to be significantly more risk-averse than men at least at the 10% significance level in 82% of the countries. Sephavand and Shahbazian (2017) study the same risk question in a stratified (by region) random sample from Burkina Faso, also finding women to be less risk-taking compared to men.…”

Sibling correlation in risk attitudes: evidence from Burkina Faso

“…The fact that there is a higher correlation in risk attitudes within the family in Burkina Faso than Germany has also been found in previous studies. Sepahvand and Shahbazian (2020b) focusing on intergenerational transmission of risk attitudes show that the estimates for Burkina Faso are higher compared to those found by Dohmen et al (2012) for Germany, using the same risk measurements.…”

“…Third, by measuring the sibling correlation we can gain an understanding of gender specific influences in different risk domains. Sepahvand and Shahbazian (2020b) show support for a gender-specific role model hypothesis in terms of risk attitudes. We therefore investigate the relative importance of fathers' and mothers' associative effect in the financial as well as the traffic risk domain on sibling similarities.…”

“…Burkinabé children are more likely to imitate the risk attitudes of their parents if they are similar to one other, i.e. have the same sex (Sepahvand and Shahbazian 2020b). The underlying factor is that, if children view their same-sex parent performing a distinct set of activities, they will be more likely to model their own behavior and attitudes after those exhibited by the parents.…”

“…Further, the urban and rural area does not affect the transmission of attitudes between parents and children, which still seems to be the strongest, as indicated by Table 3. Sepahvand and Shahbazian (2020b) has estimated the intergenerational correlation of risk attitudes in Burkina Faso using the same risk measurements. A comparison of the intergenerational correlation estimates reported and discussed in Table 1 in Sepahvand and Shahbazian (2020b) with the estimated sibling correlations reported in Table 1 above clearly shows a considerable gap between the intergenerational correlation and sibling correlation in risk attitudes.…”