A colleague of mine, Taggert [blogauthor of A Random Walk] passed over a paper by Shane Frederick titled "Cognitive Reflection and Decision Making" published in the Journal of Economic Perspectives.
This paper explored the relationship between the results of a very simple three-question test, the "Cognitive Reflection Test" or CRT and other types of decision making.
Consider the following three questions:
1. A bat and a ball cost $1.10 in total. The bat costs $1.00 more than the ball. How much does the ball cost? _____ cents
2. If it takes 5 machines 5 minutes to make 5 widgets, how long would it take 100 machines to make 100 widgets? _____ minutes
3. In a lake, there is a patch of lily pads. Every day, the patch doubles in size. If it takes 48 days for the patch to cover the entire lake, how long would it take for the patch to cover half of the lake? _____ days
While how one does on the test is interesting, what is more interesting is what your performance on this test says about the rest of you and your decision-making processes.
As it turns out, if you got 3/3 on this exam, you were much more likely to:
prefer to have $3800 next month to $3400 this month
In other words, those scoring higher on the CRT were "generally more 'patient'; their decisions implied lower discount rates. For short term choices between monetary rewards, the high CRT group was much more inclined to choose the later larger reward."
Additionally, high CRT scorers, are much more willing to accept risk. For example, if you scored 3/3 you are much more likely to take a chance when offered this tradeoff: $1,000 for sure or a 90% chance of $5,000. . . Or even $100 for sure or a 50% chance of $300.
The score you get on these three simple questions is positively and significantly related to a whole host of personality and intelligence tests, including both the SAT and the ACT.
Okay, so while all of this was interesting enough, it got even more interesting when the author showed significant sex differences in the CRT:
Men scored significantly higher than women on the CRT.
On average, men got 1.47 while women got 1.02.
And even more interesting:
Four facts are noteworthy. First CRT scores are more highly correlated with time preferences for women than for men. . . Second. . . women were considerably more risk averse than men. . . Third, for the selected risk items, CRT is as important as sex. In other words, high-scoring women behave almost identically to low-scoring men. . . Fourth, in contrast to the pattern observed for the time preference items, CRT scores are more highly correlated with risk preferences for men than for women.
Given all of the efforts to find a "gay gene" that have showed that lesbian women are similar in significant ways to the heterosexual male, I am wondering if such similarities would show up with the CRT and the correlations made here.