Lecture 14

# Lecture 14 - May 6 13 What causes economic inequality Word...

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May 6, 13 What causes economic inequality? Word of the Day Probity o “The quality or condition of having strong moral principles; integrity, good character; honesty, decency” Measuring IQ in The Bell Curve Hernnstein and Murray use AFQT (armed forces qualifying test) scores to measure intelligence o The questions aren’t too hard but there’s definitely an aspect of school achievement rather than innate intelligence (you can definitely do better if you learned a lot in school) AFQT scores are converted into Z-scores to facilitate comparison; they are standardized o A number that ranges roughly from -3 to 3 and it represents how many standard deviations a particular score is above or below the mean Measuring socioeconomic status Hernnstein and Murray measure SES by constructing a SES index comprised of four variables (each weighted equally, resulting score standardized): o Mother’s education o Father’s education o Parental occupation o Family income To assess the relative influence of intelligence and SES on the probability that a NLSY respondents would be poor, Hernnstein and Murray use a method of statistical analysis called logistic regression o The dependent variable in a logistic regression is a binary variable, unlike OLS regression, where the dependent variable is continuous Dependent variable in this particular analysis is whether a respondent reported a household income that was below the poverty line in 1989 Types of variables Continuous variables : can take on a large range of values o E.g. income or age. Are measured on an interval scale o Is used in orderly squares regression (ex: Y = AX + B) Categorical variables : can take on only a limited number of values. E.g.

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