Wednesday, May 23, 2007

IQ and Wealth
The great question about this article is…does the fact that the study controls for years of education completely invalidate the conclusion, since IQ strongly predicts years of education?
The key factor, of course, is whether or not they also controlled years of education when they measured income per person. If yes, then it means that IQ does indeed play a role for income, yet, for some reason, higher IQ people just spend more money and therefore don’t save more.
Nonetheless, the data still says SOMETHING. IQ differentials, even at the same level of education, should be generating higher levels of wealth, as small differences in IQ still imply greater intelligence, and therefore higher salaries and better decision-making skills.
So, why in the world is IQ NOT increasing wealth?The best argument that I can think of is that, at a given level of education, as your IQ goes up, so do your socially destructive habits; after all, if you were more stable, you’d have a higher level of education, wouldn’t you? The end effect is that you are more likely to get divorced, spend more, etc, and therefore your wealth will be negatively affected in the long-run.

1 comment:

Lew said...

Something to consider as you examine the concept. (I must confess I didn't read the original article, this comment is solely based upon your analysis)

Many people with a high IQ have decided that they don't wish to be wealthy. They put more value in non-material things in their life. Their drive to succeed may be in completely altruistic things, making their mark upon the world without earning piles of money in the process.