Take all components to be centered and let their marginal variances be . A linear structural equation model is
where are mutually independent and the are identically distributed. The causal directed acyclic graph has arrows
For monozygotic twins, set with ; the genetic cause is completely shared. For dizygotic twins, one explicit construction is
where are independent with variance . Then both additive genetic terms have variance , while their covariance is and their correlation coefficient is . In a fuller graph, the shared points to both genetic components and the unique points only to its own component.
The common marginal trait variance is
For monozygotic pairs, shared genes and shared environment give
For dizygotic pairs, the genetic covariance is halved while the common environment is unchanged:
Subtracting cancels the common-environment variance and proves Falconer's formula
the heritability under the ACE model.
Suppose assortative mating raises the dizygotic genetic correlation from to . Then
so the formula returns
Thus using the nominal one-half genetic correlation produces downward bias in estimated heritability, assuming the other ACE assumptions remain valid.

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