People with higher IQs make wiser economic choices, study finds

People with higher measures of cognitive ability are more likely to make good choices in several different types of economic decisions, according to a new study with researchers from the University of Minnesota's Twin Cities and Morris campuses.

The study, set to be published online in the this week, was conducted with 1,000 trainee truck drivers at Schneider National, Inc., an American motor carrier employing 20,000. The researchers measured the trainees' and asked them to make choices in several economic experiments, and then followed them on the job.

People with better cognitive skills, in particular higher IQ, were more willing to take calculated risks and to save their money and made more consistent choices. They were also more likely to be cooperative in a strategic situation, and exhibited higher "" in that they more accurately forecasted others' behavior.

The researchers also tracked how trainees persevered on their new job. The company paid for the training of those who stayed a year, but those who left early owed thousands in training costs. The study found that those with the highest level of cognitive ability stayed at twice the rate of those with the lowest.

The finding that individual characteristics that improve economic success -- patience, risk taking and effective social behavior -- all cluster together and are linked through cognitive skill, which could have implications for policy making and education.

"These results could shed light on the causes of differential economic success among individuals and among nations," said University of Minnesota-Twin Cities economist Aldo Rustichini, a co-author whose theoretical work on cognitive skills is used in the paper.

"It also suggests that the benefit from early childhood education programs not only affects cognitive skills, but extends to more effective economic decision-making," said study co-author Stephen Burks, the University of Minnesota-Morris economist who organized the project that gathered the data.

Source: University of Minnesota (news : web)


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Citation: People with higher IQs make wiser economic choices, study finds (2009, April 27) retrieved 19 August 2019 from https://phys.org/news/2009-04-people-higher-iqs-wiser-economic.html
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Apr 27, 2009
Depends if we're talking about drilling oil, winning an election, swindling a country or mathematical mental masturbation.

Apr 27, 2009
Smarter people tend to make smarter choices; news at eleven.

Apr 27, 2009
"These results could shed light on the causes of differential economic success among individuals and among nations," said University of Minnesota-Twin Cities economist Aldo Rustichini"

That's for sure, the only place this incredibly stupid waste of time could get funding is the US.

Apr 28, 2009
This is pure science guys. Just slight interpretation deviation can be observed:
The name of the article should be "Scientific proof that IQ really matters..."

Cheers.

Apr 28, 2009

That's for sure, the only place this incredibly stupid waste of time could get funding is the US.


Talk about a one line response to an article that states the obvious...good one.!!

I did not see the range of IQ scores [ maybe I missed it] , but i'm sure they were not above 140.

Common sense dictates that anyone with the ability to grasp different concepts with ease [ higher IQ ] is less likely to make a choice that would be detrimental to his/her well being , or financial situation.

I belong to a few societies [ IIS,IHIQS,Ne Plus Ultra, Cerebrals,ePiq,Intertel, etc.... ] how about giving the tests to members of these societies, and see how they fare. But please do not waste school, or public funds on it.....here is the outcome....yes higher IQ leads to common sense choices!!!

Apr 28, 2009
Minutes from a meeting at Schneider Inc a couple of years back:

Maybe we could set up some kind of testing program for Schneider Inc. and then get it funded by the state. I've got a brother working at the University this could save Schneider Inc a buttload of cash.

Apr 29, 2009
I thought this was a stupid article.. Until I realized that it originated in Minnesota.
Maybe Al Franken wrote it and in that case...
It's his best and brightest work!

I can promise you that this IQ observation does NOT coincide with the 2008 elections!

JL Mealer
MealerAMC
http://betterconstructed.com

May 06, 2009
Jumpin' Jahosephats! - Rick Romero missed this one! I don't believe it!

But just to prove the absurdity of this "study" I'll sight my own statistics of an IQ that has ranged from 125 - 142 and some of the most typically terrible financial decisions. Examples:

1. Spent close to $80K on student loans to get myself a top-tier MBA. That landed me a job in IT consulting and laid off in the crash of '01.

2. Bought a condo in Dec. 2006 that is now worth 30% of it's purchase value.

These two decisions have left me with quite a bit of debt.

As they say, "2 out of 3 internet studies are disproven"

:P

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