Intergenerational Transmission of Financial Biases

Abstract

The aim of this study is to test the intergenerational transmission of frequently observed financial biases. We elicited financial biases of first -year university students and their parents. Results indicate the intergenerational transmission of illusion of control, loss -aversion, and overconfidence from parents to children as well as transmission of affinity bias only from parents to daughters. Financial knowledge and saving habits of students have a strong influence on the transmission of financial biases. In addition, we found a moderate effect of economic preferences in the transmission process.