Eric Schoenberg

Family Value Investing

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Abstract:
Why is it so difficult to maintain family wealth across many generations? In this paper, I offer an answer to this question based on research in behavioral economics. I begin by examining a seemingly unrelated question: why don't more investors use the "value investing" approach developed by Columbia Business School professors Benjamin Graham and David Dodd, and made famous by the success of their disciple Warren Buffett? I offer an answer based on the idea that people care more about relative than absolute wealth, and then explain how such relative wealth concerns affect behavior, particularly among inheritors.

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