IQ For Economists
July 20, 2007, 06:28 PM
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After trying hard for half a decade to completely ignore the data set on average national IQs in Lynn & Vanhanen's IQ And The Wealth Of Nations economists are now starting to attack it, albeit with embarrassing results.

While IQ hardly explains everything in this extremely complicated world, it does explain more than economists have traditionally given it credit for (which is virtually nothing). In other words, IQ is an underexploited resource in the field of economics. It's a $20 bill that's been lying on the sidewalk while the entire U. of Chicago faculty walks by.

For the next generation of economists who might be looking around for something important but vastly underexploited to analyze, let me review a key point. The nature vs. nurture arguments about IQ can be a distraction because they aren't all that relevant for your purposes.

What is important for economists is the stability of national and group average IQ scores. If they have zoomed all over the place relative to each other, they don't have much explanatory power about how we've gotten to where we are. And if they are likely to change quickly and unpredictably over the next few years, why bother worrying about them?

For better or worse, however, we can be confident that differences in average group IQ are going to be around for a long time.

The relative gaps among groups have been fairly stable for several generations. East Asians may have picked up a few points on everybody else over the last 40 or 50 years, and Maoris in New Zealand may have done the same (although New Zealanders tell me that may just be mixed race people reclassifying themselves to get affirmative action benefits), but otherwise, remarkable relative stability is the norm.

One of Lynn's recent books, for instance, lists 620 IQ studies of different groups going back, in a few cases, to the first quarter of the 20th Century. I've created a graph showing that there has been no overlap of average scores among Japanese (23 studies in red), Hispanics in America (17 studies in green), and Australian Aborigines (17 studies in blue). Stability Of Average IQ Over The  Generations

The Japanese have consistently scored somewhere around 105 on a scale where white American are pegged at 100, Hispanics in the U.S. at about 90 (which, by the way, is roughly the world average), and Australian Aborigines at very low levels.

I don't know what causes differences in average IQ, but the evidence is overwhelming that they were stable enough over the 1950-2000 era to be used in studies, and, with almost as much assurance, that they will be stable enough over, say, the 2000-2030 era to be important to study for the future.

If a gap between two groups suddenly disappeared in all the babies being born tomorrow for some magic reason, the gap among the workforce wouldn't begin to shrink until 2025 and wouldn't disappear until 2072.

So, the current realities demand far more study than they've gotten from the economics profession.