# Actually, You Did Well On The SATs Because Your Parents Are Rich AND Smart

The chart on the right, which has inflamed everyone, shows the correlation between scores and family income.

But Brad DeLong argues that it’s not just that your parents are rich that helps you out, he says.  It’s also that they’re smart.

DeLong attributes about half of the correlation of your SAT performance to money, and half to genetics:

Off the top of my head…

IIRC, the age-adjusted correlation between log income and IQ is 0.4: take someone with a log income higher by one standard deviation than average–these days someone with a middle-age-adjusted family income of \$100,000-\$120,000 rather than \$60,000-\$80,000–and their IQ is likely to be 0.4 standard deviations (6 points) above average. The individual heritability of IQ is about 0.5: take an individual with a IQ 6 points above average and their children will be expected to have an IQ 3 points above average. SAT scores have a mean of 500, a standard deviation of 100, and a high but not a perfect (0.7) correlation with IQ.

So if we compare people whose parents have an income of \$100,000-\$120,000 to those with an income of \$60,000-\$80,000 we would expect to see 1 x 0.4 x 0.5 x 0.7 x 100 = 14 points. The actual jump in the graph Mankiw refers to is twice as large.

The rule of thumb, I think, is that half of the income-test score correlation is due to the correlation of your test scores with your parents’ IQ; and half of the income-test score correlation is coing purely from the advantages provided by that component of wealth uncorrelated with your parents’ (genetic and environmental!) IQ.

The curve is less steep, but there is definitely a “what” here to be thought about.

The masters at explaining this, of course, are (Googles) Samuel Bowles and Herbert Gintis, “The Inheritance of Inequality” http://www.umass.edu/preferen/gintis/intergen.pdf

UPDATE: Conor Clarke reminds me of Christiane Capron and Michael Duyme (1989), “Assessment of Effects of Socio-Economic Status on IQ: A Full Cross-Fostering Study,” Nature http://www.nature.com/nature/journal/v340/n6234/pdf/340552a0.pdf: “changes in IQ resulting from changes in postnatal environment are of similar magnitude and exhibit the same general trend independently of the SES of the adopted children’s biological parents.”