The ability to reason with numbers pays off for middle-aged couples
Crossposted to ontd_science.
RAND Corporation Headquarters in Santa Monica, California
A RAND Corporation study shows that mature couples with better math reasoning had more wealth.
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Examiner.com: Couples with better math ability wealthier by middle age
By Vince Lamb, Detroit Science News Examiner
The ability to reason with numbers pays off--literally.
That is the take-home message from a study in The Economic Journal by researchers at the RAND Corporation, University of Southern California, and University of Michigan, who found that married couples in the United States who scored high on tests of numeracy (the ability to reason with numbers and other mathematical concepts) accumulated more wealth by middle age than couples who scored poorly.
The researchers reported that when both spouses answered three numeracy-related questions correctly, family wealth averaged $1.7 million by middle age. On the other hand, couples in which neither spouse answered any questions correctly had an average household wealth of $200,000 by the same stage of life.
They also discovered that choosing the wrong person as a family's primary financial decision maker can have consequences. Although families choose the less-numerate spouse less than 20 percent of the time, when this does happen, total household wealth is lower.
"We examined several cognitive skills and found that a simple test that checks a person's numeracy skills was a good predictor of who would be a better family financial decision maker," said senior author James P. Smith of the RAND Corporation in a press release.
In addition to Smith, an economist, psychologist John McArdle of the University of Southern California and economist Robert Willis of the University of Michigan contributed to the original study. The three researchers also found that couples with higher numeracy scores invested more in stocks and that men were more likely to be financial decision makers in older couples than women, even when they no numeracy at all. They also determined that other factors, such as memory retrieval and intact mental status, were less important than numeracy for predicting a middle-aged couple's wealth.