Are “daddy’s boys” just as rich as daddy? The transmission of values between generations

The influence of parents’ savings behaviour on that of their children has often been remarked. This paper attempts to explain
this “poids d’Anchise” via a unique French dataset collected by DELTA and TNS-Sofres in 2002 (Pat€r survey), which contains
both savings and subjective information for two or three generations of the same family. Parents’ and children’s risk and
discounting preferences are significantly positively intergenerationally correlated. The correlation coefficients are around
0.25, so that the two preferences are nonetheless far from identical. In addition, the elasticity of children’s wealth with
respect to that of their parents is around 0.22. This correlation is corrected for the influence of age on wealth, and concerns
only co-existing generations, that is before the most significant intergenerational transfers have taken place. The analysis
of the raw correlations with a series of explanatory variables reveals that over 40 % of this elasticity can be explained
by the permanent incomes of the two generations. Each of education and preferences separately account for about 20 %, and
previous intergenerational transfers for about 13 %. When permanent income is controlled for, the contribution of savings
preferences is around 13 %. The transmission of preferences therefore plays a non-negligible role in the intergenerational
transmission of wealth inequalities, but is far from being the most important factor.