gwern comments on Rationality Quotes September 2011 - Less Wrong

7 Post author: dvasya 02 September 2011 07:38AM

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Comment author: gwern 03 September 2011 02:34:35AM *  20 points [-]

How about http://www.psychologicalscience.org/index.php/news/releases/are-the-wealthiest-countries-the-smartest-countries.html ?

They found that intelligence made a difference in gross domestic product. For each one-point increase in a country’s average IQ, the per capita GDP was $229 higher. It made an even bigger difference if the smartest 5 percent of the population got smarter; for every additional IQ point in that group, a country’s per capita GDP was $468 higher.

Citing "Cognitive Capitalism: The impact of ability, mediated through science and economic freedom, on wealth". (PDF not immediately available in Google.)

EDIT: efm found the PDF: http://www.tu-chemnitz.de/hsw/psychologie/professuren/entwpsy/team/rindermann/publikationen/11PsychScience.pdf

Or http://www.nickbostrom.com/papers/converging.pdf :

Economic models of the loss caused by small intelligence decrements due to lead in drinking water predict significant effects of even a few points decrease (Salkever 1995; Muir and Zegarac 2001). Because the models are roughly linear for small changes, they can be inverted to estimate societal effects of improved cognition. The Salkever model estimates the increase in income due to one more IQ point to be 2.1% for men and 3.6% for women. (Herrnstein and Murray 1994) estimate that a 3% increase in overall IQ would reduce the poverty rate by 25%, males in jail by 25%, high-school dropouts by 28%, parentless children by 20%, welfare recipients by 18%, and out-of-wedlock births by 25%.

EDITEDIT: high IQ predicts superior stock market investing even after the obvious controls. High IQ types are also more likely to trust the stock market enough to participate more in it

Comment author: gwern 18 July 2012 03:15:38PM *  12 points [-]

"Do you have to be smart to be rich? The impact of IQ on wealth, income and financial distress", Zagorsky 2007:

How important is intelligence to financial success? Using the NLSY79, which tracks a large group of young U.S. baby boomers, this research shows that each point increase in IQ test scores raises income by between $234 and $616 per year after holding a variety of factors constant. Regression results suggest no statistically distinguishable relationship between IQ scores and wealth. Financial distress, such as problems paying bills, going bankrupt or reaching credit card limits, is related to IQ scores not linearly but instead in a quadratic relationship. This means higher IQ scores sometimes increase the probability of being in financial difficulty.

One could also phrase this as: "if we control for factors which we know to because by intelligence, such as highest level of education, then mirabile dictu! intelligence no longer increases income or wealth very much!"; or, "regressions are hard, let's go shopping."

Apropos of http://lemire.me/blog/archives/2012/07/18/why-we-make-up-jobs-out-of-thin-air/

In the XXIst century within wealthy countries, people work hard primarily to gain social status. We often make the mistake of tying up wealth with social status, but most of the wealthy people we admire are also consumed by their great jobs. Celine Dion is very wealthy, yet she would still give one show every single day, including week-ends. I think most professors would feel exploited if they had to lecture every single day. Bill Gates is very wealthy and universally admired, however, as we may expect, he worked nights and week-ends as chairman of Microsoft. Every year he would read 100 papers from Microsoft employees about the state of the company.

...For many, wealth is merely a stepping stone to intense work. This may explain why people with higher IQs are not wealthier (Zagorsky, 2008): high IQ people may have an easier time getting rewarding work so they need less wealth....I used to openly worry that robots would steal our jobs and leave most of us in poverty. I have now concluded that I was underestimating the pull of prestige among human beings. We will make up jobs out of thin air if we need to.

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