Are more intelligent groups of people better at cooperating? Repeated prisoner’s dilemma (RPD) experiments run at numerous universities since 1959 may hold the answer. Overall, the tendency is clear: Students at schools with higher average SAT and ACT scores cooperate much more often—yielding about 5% more cooperation for every 100 combined SAT points (See Figures 1-3). Students at the best schools cooperate about 15% more often than typical college students.
These results may be of special interest to growth and development economists...Jones and Schneider (2006b) demonstrate a correlation of 0.8 between national average IQ and log GDP per capita, and in a Bayesian model averaging test, Jones and Schneider (2006a) found that in steady state 1 IQ point is associated with 6% more output per person (for similar results cf., inter alia, Ram (2006), Weede and Kampf (2002), Lynn and Vanhanen (2006)).
However, Jones and Schneider (2006b) report that in the labor literature, the correlation between IQ and log wages is only about 0.3, and 1 IQ point is associated with only about 1% higher wages. Thus, IQ seems to matter more at the macro level than at the micro level. The question arises: Why the difference between individual and aggregate outcomes?
We know that The Unmentionable is correlated with individual incomes. There is also notorious work, to which he refers, showing a relationship between national average Unmentionable and economic growth. In fact, the quoted passage appears to be saying that the Unmentionable has an even stronger effect at a national average level, suggesting that there is some sort of positive externality involved. The point of this paper is that one of those positive externalities may be that people with high levels of The Unmentionable are better able to co-operate with one another.
Garett will be speaking on this paper tomorrow here, which is on the other side of the river from me, and at rush hour, to boot. I'd need a GPS and a large supply of road-rage-suppressant meds in order to attend.