  Our understanding of risk preferences can be sharpened by considering their
evolutionary basis. The existing literature has focused on two sources of risk:
idiosyncratic risk and aggregate risk. We introduce a new source of risk,
heritable risk, in which there is a positive correlation between the fitness of
a newborn agent and the fitness of her parent. Heritable risk was plausibly
common in our evolutionary past and it leads to a strictly higher growth rate
than the other sources of risk. We show that the presence of heritable risk in
the evolutionary past may explain the tendency of people to exhibit skewness
loving today.
