Similarity in the g factor structure between- and within-families across racial groups in the NLSY97 and NLSY79

In Bias in Mental Testing (1980, pp. 546-548), Arthur Jensen showed that a congruence coefficient test from a factor analysis of the within- (WF) and between-family (BF) correlations among blacks and whites could yield an identical g factor structure. A similarity in factorial structure for these four groups having been evidenced, he writes :

These correlations are statistically homogeneous; that is, they do not differ significantly from one another. Thus it appears that the g loadings of these seven tests show a very similar pattern regardless of whether they were extracted from the within-family correlations (which completely exclude cultural and socioeconomic effects in the factor analyzed variance) or from the between-families correlations, for either whites or blacks. … This outcome would seem unlikely if the largest source of variance in these tests, reflected by their g loadings, were strongly influenced by whatever cultural differences that might exist between families and between whites and blacks.

Jensen (1980, Table 4) has been replicated by Nagoshi and Johnson (1987, pp. 310-314). I will replicate those earlier tests using NLSY97 and NLSY79. As Jensen (1998, pp. 99-100) noted, the congruence coefficient (CC) can be interpreted as being an index of factor similarity.

Continue reading

Causes of group differences studied with the method of correlated vectors: A psychometric meta-analysis of Spearman’s hypothesis

Causes of group differences studied with the method of correlated vectors: A psychometric meta-analysis of Spearman’s hypothesis

Joep Dragt (master thesis, 2010).

Study 1: Effect of Language Bias in Subtests

When comparing test scores of people who lack a desirable level of proficiency in the target language and bilinguals (i.e., most immigrants) against the test scores of native speakers, a distinction is usually made between verbal and nonverbal tests. Subtests with a substantial verbal component measure to an undesirable extent proficiency in the language of the test taken and underestimate the level of g of the tested nonnative speakers (see te Nijenhuis & van der Flier [1999] for a review of Dutch studies). The more limited the language skills, the larger the underestimate. Language bias plays a clear role in the testing of immigrants in Europe, but also in the testing of Blacks in South Africa, where the English used in the test, it is sometimes the second or even third language of the Black test taker.

In a study of Dutch immigrants, using a mixture of culture-loaded and culture-reduced tests te Nijenhuis and van der Flier (2003) found that the highly verbal subtest Vocabulary of the GATB is so strongly biased that it depresses the score on Vocabulary by 0.92 SD, leading to an underestimate of g based on GATB IQ, with as much as 1.8 IQ points due to this single biased subtest alone, whereas the other 7 subtests combined show only very little bias. However, one should not forget that subtests with a strong verbal component usually constitute only a small part of a test battery; due to the use of sum scores the strong bias in tests with a verbal component becomes diluted.

Looking at the effect of length of residence in the Netherlands on the scores on various intelligence tests also shows the influence of language. Tests without a verbal component show small to negligible correlations with length of residence, tests with a verbal component show moderate correlations, while language proficiency tests show large correlations (see te Nijenhuis & van der Flier, 1999; see van den Berg, 2001, p. 37). All these findings regarding the clear but modest role of language bias are in line with the findings of language bias when testing Hispanics who do not have a desirable level of proficiency in the target language or who are bilingual (Lopez, 1997; Pennock-Román, 1992).

In the US studies on Spearman’s hypothesis it is usually native-born Blacks and Whites who are compared. Therefore language bias is not the problem that it is in the study of immigrants, and Blacks and Whites in South Africa. However, studies of Hispanic immigrants may show language bias. In order to combine the diverse studies for a meta-analysis the effects of language bias had to be taken into account. We did this by leaving out subtests with a substantial language component for immigrants in Europe; Blacks in South Africa; and Mexican immigrants in the US for some studies. When there were still at least seven subtests left we recomputed the correlation between d and g and included that data point in the meta-analyses. Therefore Table 5 of Study 3 in some cases shows two correlations between d and g: one for all subtests and another after excluding one or more subtests with a substantial language component.

Continue reading

Austrian Business Cycle Theory, by Jesús Huerta de Soto

Jesús Huerta de Soto, Money, Bank Credit, and Economic Cycles, Second Edition.

Chapter 5 : Bank Credit Expansion and Its Effects on the Economic System

The term first-order economic goods has traditionally referred to those consumer goods which, in the specific, subjective context of each action, constitute the goal pursued by the actor in performing the action.

The achievement of these goals, consumer goods, or first-order economic goods, is necessarily preceded by a series of intermediate stages represented by “higher-order economic goods” (second, third, fourth, etc.). The higher the order of each stage, the further the good is from the final consumer good.

This picture might help in better understanding the concept. On the left we have the early stages of production, or stages furthest from consumption. On the right we have the final stages of production, or stages closest to consumption.

Continue reading

Austrian Business Cycle Theory : On the Interest Rate and the Cambridge Capital Controversy

Critics of the ABCT believe that CCC constitutes a strong rejection of the austrian theory of capital. Apart from the empirical evidence of ABCT, one problem with the assumptions of the reswitching theory is that it assumes that ABCT is all about the change in capital-intensiveness following a change in interest rates. ABCT does not even depend on the change in interest rates per se, nor even on a “single” natural interest rate as some wrongly believed; Sraffa being just one of them. But as the reswitching technique theory implies the possibility of capital reversing, which is to say, the association between the nature of the production techniques employed and rate of interest is not a monotonic one. That is, a decline in interest rates might lead to a lengthening in the structure of production through more capital-intensive techniques, when at the same time a further decline in interest rates will trigger a drop in the length of the structure of production through less capital-intensive techniques. In other words, that relationship is an U-shaped.

Continue reading