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Overspending: Blame It On Your ‘Debt Gene’?
When you apply for a mortgage in 10 years, you may be asked for your bank statements, your pay stubs… and a cheek swab. At least that’s one possible implication of a new study, which reports a groundbreaking finding: that whether you carry a specific gene variant can predict your propensity to rack up credit card debt.
Specifically, Jan-Emmanuel De Neve, of the London School of Economics, and James Fowler, of the University of California, San Diego, have found that if you carry one or both “low efficiency” alleles of the MAOA gene — we’ll get to what exactly the MAOA gene is and does in a minute — the likelihood that you have credit card debt increases by 8% and 16%, respectively.
It’s a first-of-its-kind result, but what exactly does it mean? Does it mean that humans carry a “debt gene”? And if you were to carry such a gene, does that mean you’re doomed to a life of financial turbulence and tribulation?
The short answer is that, no, there’s no “debt gene,” as such. But there are a number of genes, plus environmental factors, that influence economic decision making. (Still, read the whole thing!)
You can take a look at the paper here (abstract with free link to PDF).
An interesting section I didn’t quite get to in the column was the paper’s discussion of what this finding means for economics as a whole. So, here it is (citations omitted):
More broadly, these results represent an important first step for economics as a discipline. They show that incorporating genetic information into our theories and analysis may contribute to a greater understanding of economic behavior. The environment-only approach used for so long in economics has frequently conceptualized human behavior as a “blank slate” on which any tendencies could be drawn, regardless of the unique biology of each individual. However, the results presented here refute the blank slate theory of economic behavior. Although the environment is extremely important in shaping financial and other economic decisions, perhaps even more so than genes, we can no longer act as if genes do not matter at all. Genetic differences are likely to have important consequences for a whole range of economic behaviors.
Of course, genes would have no influence on debt behavior if credit cards were not available. So in some sense, the environment should still be the primary focus of economic inquiry. However, the evidence we report here suggests that in the context of a particular institutional environment (the availability of credit cards), different genotypes can yield different outcomes. Even if they could carry debt, many people do not, and this is at least partly due to genetic differences. So just like social institutions, genes constrain individual behavior. In other words, genes are the institutions of the human body — and any attempt to understand human behavior without them would be like studying politics without laws or markets without regulation.
I like that. “Genes are the institutions of the human body.” They constrain individual behavior just as institutions constrain the behavior of groups of people. It’s an important concept, and it will only get more important the more we understand how important genes are to the economic decisions we make.
This study is the first time a specific gene has been linked to a specific behavior in the real world. But we’re already seen other studies, in a lab setting, linking specific genes to another specific behavior — risk taking on an investment task.
We’re only going to see more of this as genome sequencing gets cheaper.
Below the fold, the detailed explanation of how the MAOA gene might be linked to credit card debt, from the paper (citations omitted)…
To study whether genes affect economic behavior we chose a candidate gene that has already received a great deal of attention for its association with behavioral traits. The MAOA gene is critical to the metabolism of serotonin and other neurological processes in the brain. … [S]erotonin is a chemical that is released when a neuron “fires” and sensed by a receptor on the receiving neuron, passing an electric potential across a gap called a nerve synapse (the nerve that fires is on the “pre-synaptic” side of the gap). Signals are carried throughout the body by the sequential firing of one neuron after another across these synapses. When an individual experiences stress, it causes increased neuron activity, stimulating the release of excess serotonin into the gaps between the synapses. If serotonin remains outside the cells, it can oxidize into a toxin that kills both the pre-synaptic and post-synaptic neurons. The body’s homeostatic response to this excess serotonin is to reabsorb it into the pre-synaptic neuron via a transporter in the cell wall. Once the “reuptake” of serotonin is complete and it is back inside the neuron, an enzyme called monoamine oxidase A (MAOA) degrades the serotonin so that its components can be reabsorbed in the cell. The gene responsible for transcribing MAOA is eponymous— the MAOA gene produces MAOA.
Animal studies indicate that the serotonin system has an important effect on social behavior. Rhesus macaque monkeys with impaired serotonin metabolisms are impulsive in response to social stressors and studies of rodents show that acute emotional stress affects the way MAOA breaks down serotonin in several areas of the brain. In mice, knock-out studies that eliminate the MAOA gene in subjects cause enzymatic activity to come to a complete halt . MAOA has also been shown to alter the structure of the brain in mice. There is strong evidence that the serotonin system affects complex social traits in humans. For example, the serotonin function has been associated with aspects of impulsivity, such as reward sensitivity and inhibitory cognitive control, and is also related to prefrontal cortex activity.
MAOA has a 30 base-pair VNTR polymorphism located in the promoter region. The “low” version of this polymorphism significantly decreases the transcriptional efficiency of MAOA. The less transcriptionally efficient alleles of MAOA have been linked to impulsive and addictive behavior, as well as attention deficit disorder, all of which appear to be mediated by certain parts of the brain.
Ryan Sager
