According to an article in the New York Times, Jewish Americans have higher IQ’s than other Americans. There’s an old saying “if you’re so smart, why aren’t you rich?” so we should expect great wealth to be especially common among Ashkenazi Americans, given their IQ’s. Despite being 2% of the U.S. population, Jewish Americans are an astonishing 35% of the 400 richest Americans. This implies that U.S. billionaires are 1.67 standard deviations more Jewish than the general U.S. population. Assuming this Jewish over-representation was caused by the high level of Jewish intelligence, we can estimate the average billionaire IQ to be 2.9 SD above the U.S. mean or roughly IQ 143 (to understand the math, see here).
I would expect billionaires (at least the generation that made the wealth) to be extremely smart given that from a Darwinian perspective, intelligence is the mental ability to adapt any situation to your advantage. In addition, the rise of computer geeks, many of whom are billionaires and probably have IQ’s pushing 170 (a couple Microsoft billionaires reportedly scored perfect on the old SAT (IQ 171), though such claims tend to get exaggerated), is another reason to expect billionaires to be super-smart.
On the other hand, 143 is incredibly high given that IQ only explains about 16% of the variation in income (other factors like luck, hard work, ambition, good looks, charisma, special talents, connections etc, also matter a lot). For example Sara Blakely claims she flunked the LSAT, yet became the youngest self-made female billionaire largely because Oprah loved the footless pantyhose she created. Blakely is hardly an outlier. Dr. Bill Cosby was never a billionaire, but he was one of 400 richest Americans back in the early 1990s, and he claims to have scored 500 on the old SAT (IQ 85). Cosby’s obviously way smarter than IQ 85, and probably smarter than IQ 115 (in my humble opinion, the SAT is biased against kids from lower socio-economic background) but a good scientist can not throw out data arbitrarily:
If we assume that IQ’s on the Forbes 400 range from 85 (Cosby) to 170 (Microsoft), we might estimate that the average IQ would be about 130, a lot lower than what we’d expect from the extreme levels of Jewish over-representation.
As the hyper-educated blog commentator Pincher Martin noted, focusing on only Jewish representation can be misleading when trying to estimate the IQ of high achievers. It’s much wiser to look at other ethnic groups too.
Big Brained Oprah is still America’s only black billionaire
HBD has a sleazy reputation because back in the 19th century, HBD people were very mean to blacks and women, saying they were poor and powerless because they had small brains. We now know there are incredibly brilliant and big brained people in all large races and genders, and I find it absolutely fascinating that the only African American on Forbes list of the 400 richest Americans is arguably the biggest brained member of both her race and her gender.
From an evolutionary perspective this makes perfect sense, because brain size tripled in 4 million years of human evolution because only our biggest brained ancestors were typically adaptable enough to acquire enough resources to survive. Today, we have a social-safety net, so even small brained people survive, but the big brained Oprah has acquired orders of magnitude more resources (wealth) than most most Americans. It’s almost like you need some kind of rare biological advantage to become a billionaire. According to this New York Times article, Ashkenazi Jews might have IQ enhancing genes associated with certain diseases, and according to pumpkinperson, Oprah has a stratospheric brain size helping her to compete with the greatest Ashkenazi entrepeneurs.
Back in 1993, when you only needed about $330 million to make the Forbes 400 list of richest American, Bill Cosby was the only African-American to qualify, but big-brained Oprah was making money at record speed, and Cosby advised his young friend to always sign her own cheques. She took this advice, and the next year, with a net-worth of $340 million, she had dethroned him as the only African American on the list. Today, you need over a billion to make Forbes 400, and with a net-worth of nearly $3 billion, Oprah remains the only African American on the Forbes 400 (though the 2014 list hasn’t been released yet, but should be published any day now).
Estimating the IQ of the Forbes 400 from African-American under-representation
If African Americans are 12% of America, but 0.25% of the Forbes 400, then that means that the Forbes 400 is 1.6 SD less black than America as a whole. Does that mean that the Forbes 400 is 1.6 SD more intelligent than America as a whole? Of course not, because the correlation between IQ and sub-Saharan ancestry is small, and Oprah is probably a lot smarter than the average billionaire because she has far greater brain size and cultural influence and overcame adversity and very humble origins to achieve her wealth in such a competitive and improvisational field.
If there were a perfect negative correlation between IQ and African ancestry within the U.S., then the 12% Americans who are black would all be in bottom 12% of American IQ (below 83) and thus have an average IQ around the 6 %ile (IQ 77). But in reality, the average African-American has an IQ of 87 (perhaps higher in the younger generation raised in the post-civil rights era), so they score only 13 points lower than the U.S. mean of 100 on average (though some blacks score in the stratosphere), not 23 points lower. This implies that if it were possible to measure race on a continuous scale, African ancestry would correlate -0.57 with IQ (13/23). But since IQ only correlates 0.85 with general intelligence, and socially classified race probably only correlates 0.9 with actual ancestry, we need to divide 0.57 by 0.85 and then 0.9 to see that African ancestry has a true g loading of -0.75. Thus, the fact that U.S. billionaires are 1.6 SD less African-American than the U.S. as whole, suggests their average level of g is 2.13 SD higher than the U.S. average. But since even good IQ tests typically have only a 0.85 g loading, we multiply by 0.85, suggesting a mean IQ of 1.81 above the U.S. mean (IQ 127).
Two conflicting estimates
Based on Ashkenazi over-representation I estimate the Forbes 400 to have a mean IQ of 143 but based on African American under-representation, I estimate it to be 127. Let’s split the difference and assume the average self-made billionaire has an IQ around 135. Of course my analysis involved all members of the Forbes 400, not self-made members only, but since the children and spouses who inherit billions are virtually always the same ethnicity as those who made it, the ethnic distribution of the former just reflects the ethnic distribution of the latter several decades ago, even though trust-fund babies cognitively regress precipitously to the mean. Note that an IQ of 135 is similar to the IQ of 130 I estimated above for the Forbes 400, based on the SAT scores of Cosby and Microsoft billionaires.
Based on the 0.4 correlation between IQ and income, you’d expect people who are on average +5 SD in income to be (5 SD)(0.4) = +2 SD in IQ (IQ 130). It’s also worth noting that U.S. presidents (who live the life-style of a billionaire, despite earning only six figures in office) seem to have an average IQ around 130.
Estimating the IQ of the homeless
Although African-Americans are 12% of the U.S. population, they are 38% of the homeless. This implies the homeless population is 0.93 SD more African American than America as a whole. Dividing this figure by -0.75 and multiplying by 0.85 (see above) suggests the homeless has a mean IQ that is -1.054 SD below the U.S. average (roughly IQ 84).
Indeed, a study in the Canadian Journal of Behavioral Science stated:
In the complete sample of homeless individuals, a full-scale IQ score of 84.3 was reported. This is significantly lower than is estimated for the normal population. Indeed, 19.2% of the sample scored in the “extremely low” range, having IQ scores less than 70. Our findings are consistent with previous reports of IQ in homeless samples, which ranged from the “low average” (Seidman et al.,1997) to “average” range (Louks & Smith, 1988). Using the same IQ test as used in our study (WASI), Solliday-McRoy and colleagues (2004) studied a sample of homeless shelter residents in the United States and found a mean full-scale IQ of 83.7, with 20% scoring in the “extremely low” range. This finding is very similar to that found in our U.K. sample.
An average IQ of 84 for the homeless is consistent with pumpkinperson’s law: Average IQ varies 8 points with every ten-fold increase or decrease in financial success:
Three figure income earners (the homeless): Average IQ 84
Four figure income earners (part-time minimum wage): Average IQ 92
Five figure income earners (middle class): Average IQ 100
Six figure income earners (future millionaires): Average IQ 108
Self-made deca-millionaires: Average IQ 116
Self-made centi-millionaires: Average IQ 124
Self-made billionaires: Average IQ 132
Self-made deca-billionaires: Average IQ 140
If you made your money in STEM, add 10 IQ points to the expected IQ of your income. If you made your money in a low-brow occupation like selling pantyhose, perhaps subtract 10 points from the expected IQ for your income. And obviously there is enormous variability within each economic class, with some homeless people being smarter than most self-made billionaires.