Summary: New research from the University of Bath shows that people with higher IQ scores are substantially better at predicting future outcomes, which supports more accurate decision-making. Using data from the English Longitudinal Study of Ageing (ELSA), researchers evaluated how well adults over 50 could estimate their own life expectancy and found that higher cognitive ability correlated with more accurate probabilistic judgments.
The study demonstrates that individuals with higher intelligence make fewer and smaller forecasting errors when estimating the probability of living to certain ages. These findings suggest that cognitive ability—and genetic markers associated with intelligence—play a central role in how people assess risks, probabilities, and uncertain future events, with direct implications for health, finance, and public policy.
Key Facts:
- IQ and prediction accuracy: Participants in the top 2.5% of IQ scores made substantially fewer and less extreme forecasting errors than those in the bottom 2.5%.
- Genetic links: Genetic markers associated with intelligence and educational attainment were related to improved calibration in probabilistic estimates.
- Policy relevance: Presenting explicit probability information in health and financial communications could reduce forecasting errors and improve decisions, especially for those with lower cognitive ability.
Source: University of Bath
A new study from the University of Bath’s School of Management finds that higher cognitive ability is associated with more realistic expectations about uncertain outcomes, which helps explain better life outcomes for people with higher IQs.
Published in the Journal of Personality and Social Psychology, the research analysed responses from a nationally representative sample of adults in England aged over 50, drawn from the English Longitudinal Study of Ageing (ELSA). Participants were asked to state their subjective probability of surviving to various target ages; those subjective estimates were compared with objective probabilities derived from Office for National Statistics life tables.
Researchers controlled for differences in health, lifestyle, and genetic indicators of longevity while analysing a range of cognitive test scores and genetic variants linked to intelligence and educational achievement. Chris Dawson, Professor of Economics and Behavioural Science at the University of Bath, reports that smarter individuals appear more adept at assessing probabilities and forming well-calibrated expectations about the future.
The study found that higher-IQ respondents produced smaller forecast errors and less noise in their predictions compared with lower-IQ respondents, indicating more consistent and accurate judgement under uncertainty.
“Accurately assessing the probability of good and bad things happening to us is central to good decision-making,” said Professor Dawson. “Almost all decisions we make—whether starting a business, investing, crossing the road, or choosing a partner—rely on probabilistic assessments.”
Professor Dawson highlights that IQ already predicts outcomes such as health, income, occupational status, and educational attainment. This research identifies one mechanism—better probability estimation—through which higher cognitive ability may contribute to those advantages. He suggests that providing clear, explicit probability information in contexts like health advice and financial planning could help people who are prone to forecasting errors make more informed choices.
“The study shows that genetic traits linked to intelligence and education are associated with more accurate predictions, suggesting lower cognitive ability can causally contribute to biased expectations,” Professor Dawson added. Poorly calibrated expectations influence household decisions—how much to save, when to retire, or whether to invest—and can lead to suboptimal choices that reduce individual welfare and aggregate economic outcomes.
About this IQ and decision-making research news
Author: Alison Jones
Source: University of Bath
Contact: Alison Jones – University of Bath
Image: The image is credited to Neuroscience News
Original Research: Open access. “IQ, Genes, and Miscalibrated Expectations” by Chris Dawson et al., Journal of Personality and Social Psychology.
Abstract
IQ, Genes, and Miscalibrated Expectations
Most formal decision-making models under uncertainty require agents to assess the likelihood of relevant events. Decisions are generally better when those probability judgments are accurate. Using a nationally representative English sample of participants aged over 50 (N = 3,946), this study tests whether IQ correlates with calibration of subjective survival expectations.
The analysis provides strong evidence that high-IQ respondents make substantially smaller forecast errors and produce less noise in their predictions than low-IQ respondents. These results remain robust when using genetic variants associated with IQ as an instrumental variable (Mendelian randomization) and when using variants tied to educational attainment, which reflect cognitive and noncognitive traits relevant to educational success.
These findings illuminate mechanisms through which IQ influences beliefs about the world and help explain why lower IQ is often associated with poorer financial decision-making, lower economic welfare, and judgmental biases that can affect both individual outcomes and broader economic growth.