Smarter people no wealthier, study finds
Last Updated: Wednesday, April 25, 2007 | 2:07 PM ET
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People who score higher on intelligence tests may still have difficulty balancing their chequebooks, according to a U.S. study that finds no link between smarts and wealth.
The study of over 7,000 Americans who have been tested since the late 1970s and are now in their 40s found that while higher IQ scores have led to higher income, that income hasn't translated into greater wealth.
"Intelligence is not a factor for explaining wealth," said the author of the study, Ohio State University research scientist Jay Zagorsky, in a statement.
"Those with low intelligence should not believe they are handicapped, and those with high intelligence should not believe they have an advantage."
People with higher IQs tended to earn higher incomes, the study found, with each point increase in IQ score associated with $202 to $616 US more income per year, meaning the difference in income between a person in the normal range (100) and someone in the top two per cent of society (130) is between $6,000 and $18,500 a year.
But the same trend did not carry over when the study looked at wealth, which was defined as a combination of factors including income, investments and home value minus mortgages, credit cards and other debts.
While Zagorsky said the data don't provide an explanation for this, he suggests high-IQ people are not saving as much as others.
The study found an irregular relationship between intelligence and measures of financial distress. The percentage of people who maxed out their credit cards, for example, rises from 7.7 per cent for those with an IQ of 75 or below to 12.1 per cent for those with an IQ of 90.
It then falls to 5.4 per cent for those with an IQ of 115 before rising to six per cent for those with an IQ higher than 125.
"Just because you're smart doesn't mean you don't get into trouble," he said. "Among the smartest people, those with IQ scores above 125, even six per cent of them have maxed out their credit cards and 11 per cent occasionally miss payments."
The study, which appears online in the journal Intelligence, is based on data collected from 7,403 Americans who have been participating in the National Longitudinal Survey of Youth, a series of surveys conducted since 1979.
Survey participants were surveyed about income, wealth and three measures of financial difficulty, such as late bill payments, credit card debt and bankruptcy.
The IQ test used came from four tests found in the Armed Services Vocational Aptitude Battery, a series of tests the U.S. Department of Defence uses to judge recruits.
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