A couple of weeks ago, Tyler Cowen posted an article by the Boston Globe that surveys a group of economists working on a new sub-field called "genoeconomics." (The group of economists includes Edward Glaesar - one of my favorites.)
The article previews a bit of the world of genoeconomics - a new field in economics that takes a look at how genes impact certain economic traits. Pretty cool stuff, indeed.
Of course, this isn't the first time that there have been crossovers between the hard sciences and economics. At the turn of the century, neuroeconomics was starting to gain some traction, though I'm certainly not in-tune enough to gauge its success.
Either way, I would argue that genoeconomics is a pretty big frontier for economists. When I was taking my first microeconomics class, my professor emphasized that economics tried the answer the affects of how people behaved, not why they behaved that way. Well it certainly looks like that's about to change.
So why is this a good thing?
1. If you find a way to effectively measure the influence of genes (which is where 90% of the work lies) then you're making way for some very strong microfoundations from which to analyze other economic phenomenas. It's a lot harder to take an abstraction from genetics - because it's all right there. Now this doesn't mean that if we figured out every nook and cranny of the human genome, that we won't have to do any abstractions at all. I'm just saying that what pushes our behavior will be a lot more concrete than just saying "everyone is rational."
2. Just by the very fact that economists are wading into harder science is exciting - because it's making more economists think like scientists.
3. There are more possibilities for natural experiments. (Just look at twin studies.)
But at the same time, there are certainly downfalls to pursuing genoeconomics.
1. For one, you're giving social darwinism a lot of tools to work with. This is a point that is made clear in the Boston Globe article. There is definitely a fear of banks requiring DNA testing before receiving a loan, and other such discriminations.
2. Figuring out the statistical methods of genoeconomics will also be incredibly hard, and will have to take time. Because it's easy for someone to say - "Hey look, these people all have this gene, and they all are rich. Therefore, you will be rich if you have this gene." Bad science. I know that papers like these will emerge eventually, but we should be wary of them.