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Intelligence and Economic Sophistication
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From Empirical Economics:

Intelligence and economic sophistication

Athanasios Lapatinas, Anastasia Litina

First Online: 26 June 2018

Backed by strong empirical results, obtained from several different specification and sensitivity analyses, this paper contends that countries with high-intellectual quotient populations produce and export more sophisticated/complex products. This result is further reinforced by the quality of democracy. …

Figure 2 shows that Intelligence is positively associated with Sophistication with a correlation coefficient between ECI and IQ at 0.77. Countries with high IQ populations and high product sophistication include Japan, Singapore and Switzerland.

Screenshot 2018-07-13 14.41.04

And here’s my 2002 review of the first work in this now extensive literature, Lynn and Vanhanen’s IQ and the Wealth of Nations.

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  1. eah says:

    the quality of democracy

    That sounds rather squishy — in the paper it says: We also control for countries’ institutional differences using the Polity democracy index from the Polity IV database, for the year 2010 (Marshall and Jaggers 2002)…5.3 The effect of democracy on the nexus between intelligence and sophistication In this subsection, we place the spotlight on the potential differential effect of the democracy on the nexus between intelligence and sophistication. To identify this channel, we alter Eq. (7) to introduce the interaction term Intelligence * Polity.

  2. res says:

    Figure 1 of that paper references a really great tool for creating visualizations of imports and exports by country. It is interesting to compare how US imports were dominated by raw materials in 1962:
    While manufactured goods dominate in 2016:

    (and coffee as 6.2% of all US imports in 1962?!)

    The category boxes at the bottom are interesting (and were not obvious to me at first). They give total $ value (but not percentage) and RCA (Revealed Comparative Advantage) for that category. Clicking on the box allows you to isolate a category and drill down into it.

    P.S. I wish there was a way to get total percentages for the aggregating boxes (categories) in the main graphic. Seems like a fairly natural extension to add that to the bottom row of boxes.

  3. Look at the countries that don’t produce modern forms of transportation, i.e., cars, buses, trains and planes. While the assembly line was a boon to modern industry, an intelligent work force is needed too. Without researching are there any African countries that manufacture cars?

    • Replies: @julius caesar
  4. Athanasios Lapatinas, Anastasia Litina

    Sorry, but this is Greek to me.

    • Replies: @Elf Himself
  5. @julius caesar

    I think Rwanda is trying to get Volkswagen to start an assembly line there.

    Well, as it says in Isaiah, they shall beat their machetes into cooling fans.

  6. @Reg Cæsar

    This site needs a “rimshot” button.

    • Replies: @Reg Cæsar
  7. herp derp says:

    china does not manufacture one single vehicle for sale in the US. there are over 1 billion han in china, and their mean performance on standard pencil and paper intelligence tests is supposed to be around 100. higher on some reports.

    the mental capabilities of the people of china, or lack thereof, is the single biggest problem in psychology. in fact, it is one of the biggest problems in all of science, along with how does gravity work, and why is there even consciousness at all.

    i straight up don’t believe the reported performance of the chinese on intelligence tests. there is zero other corroborating evidence for it. no observed real world data supports it. it directly contradicts everything else in well established principles of psychology, and violates them flagrantly. there is no way to reconcile the predicted gaussian distribution of capability with the observed or demonstrated capability. psychology here is at the same place as physics with regard to relativity versus quantum mechanics. it explains a lot of stuff pretty well and makes predictions you can check…until you come to this one colossal data point, that blows up everything.

    the only thing that makes sense here is people in cities perform better on these tests than people in the country – a finding that holds in all nations. and that china probably institutionally cheats on the tests. another finding that holds in most studies. at absolute best, little flynn effect in the countryside. but that would still mean the math says chinese average performance is not even 100 on these tests. that’s the best case scenario here. and that matches the data better.

    without explaining or attempting to partially explain this HUGE, GAPING discrepancy, any study, like this one or any other, has a major problem. not all the work can be ignored – there’s still good work here – but there’s a GIGANTIC, directly contradictory data point in EVERY one of these studies – there’s a BILLION people in china who don’t behave AT ALL like the rest of the hypothesis predicts they’re supposed to.

    every study i’ve ever seen just hand waves this away. they essentially assign a value of 1 to china, where every other country also gets a value of 1. it represents 1 data point, so if the data does not match up with the prediction, that’s just 1 place where it didn’t work, but it mostly worked everywhere else. instead, the data should be weighted by population, which would blow up every one of these studies. there are 1.3 BILLION people in china! that’s more than all the other smart countries combined. which means over 50% of the observed data immediately, right off the bat, contradicts the hypothesis. not just 1 data point. over half of all the data points.

    change the weights of the math so that china gets a weight of 1392, japan gets a weight of 126, germany 82, korea 51, netherlands 17, switzerland 8, and so forth. then do the math again. BOOM. hypothesis in smithereens.

    • Replies: @EdwardM
  8. Flip says:

    What about the fact that the overseas Chinese dominate the economies of Southeast Asia?

  9. PaulS says:

    South Africa (zaf) manufactures cars.

  10. @julius caesar

    Julius, at least Rwanda has some paved roads.

    • Replies: @Reg Cæsar
  11. @Elf Himself

    This site needs a “rimshot” button.

    Thanks, much obliged.

    Here’s one, hat tip to ME[whatever his number]:

  12. @Buffalo Joe

    Julius, at least Rwanda has some paved roads.

    I’d rather not know what they’re paved with!!

    • Replies: @Twinkie
  13. Twinkie says:
    @Reg Cæsar

    I’d rather not know what they’re paved with!!

    Not good intentions, certainly.

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