The Promises and Pitfalls of Genoeconomics

In some cases, provision of genetic information can be beneficial (e.g., alerting couples who both possess disease-causing recessive mutations), while in other cases, it would be deeply problematic (e.g., sharing genetic data with health insurance companies, which effectively creates an unraveling of some of the social benefit of health insurance). Problems abound in any analysis of optimal access to genetic information, even when the individual herself is the only one who is going to have access to the data. Under what conditions will the benefits to an individual from knowing her own genetic risk factors, such as the ability to prepare well in advance for a likely illness, outweigh the costs of increased anxiety and distress (cf. Oster, Dorsey, & Shoulson, 2011)? We predict that research on these different types of questions will soon occupy a much larger fraction of economists’ energy as these issues quickly become of immediate practical relevance.

That is from the paper "The Promises and Pitfalls of Genoeconomics" by Benjamin et al (Annual Review of Economics, July 2012). From the abstract: 

Twin studies suggest that economic outcomes and preferences, once corrected for measurement error, appear to be about as heritable as many medical conditions and personality traits . . . The most urgent problem facing researchers in this field is that most existing efforts to find associations between genetic variation and economic behavior are based on samples that are too small to ensure adequate statistical power. 

A draft is here (March 2012).