Wall Street and Genetic Testing: Wouldn’t This Be Discrimination?

Admittedly, Wall Street breaks the law so often without any consequences, not to mention notions of basic decency, this would be par for the course:

Dr. Zak wanted to see if he could find the genetic signature of this personality type. Did certain genes correlate with investment success? What’s the difference between the prudent decisions of somebody like Warren Buffett—he’s famously unwilling to invest in bubbles—and the reckless bets that cause so many other traders to lose vast sums of money?

There was reason to think that such a link might exist. Previous research had shown, for instance, that 29% of the variation in whether or not people invest in stocks depends on their DNA. Studies of professional traders had demonstrated that approximately 25% of individual variation in portfolio risk is due to genetics. Other scientists had found correlations between testosterone levels and risk-taking—more hormone equals more risk—and shown that, at least among London traders, men with higher hormone levels in the morning generate larger profits.

Drs. Sapra and Zak began by analyzing the genes of 60 professional traders working in five major Wall Street firms. (They collected the DNA samples in 2008—only three of the firms are still in business.) The scientists focused on a short list of genes that are known to affect the activity of dopamine, a neurotransmitter in the brain…

It turned out that successful traders—Drs. Zak and Sapra measured success in terms of longevity on Wall Street—tended to hit a sweet spot of dopamine activity; their genes kept them from experiencing either very high or very low levels of the molecule. These prosperous professionals were much more likely to have so-called Goldilocks genes, placing them solidly in the middle of the dopamine distribution…

Dr. Zak notes that it’s far too soon to use his genetic assay as a hiring tool—the results still need to be replicated. Still, it’s possible to imagine a future in which the financial sector requires less oversight because firms have found a way to hire more prudent employees.

Given the massive amounts of money at stake, spending a few hundred dollars on a DNA kit might strike Wall Street as a particularly wise investment.

While I have doubts (if the literature is to be believed, based on studies of very small effect size, everything is dependent on dopamine level) about this approach*, let’s say, for argument’s sake, it’s legit. How is this not a clear-cut case of job discrimination?

*And longevity on Wall Street would seem to be a proxy for following the herd and schmoozing well, not necessarily making good trading trading calls.

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