People with a higher IQ make smarter life decisions

Some people seem better at making life choices, whether it’s saving for retirement, choosing the right partner, or deciding when to seek medical help. What sets them apart? According to new research, it may be their intelligence quotient (IQ) and the ability to think in probabilities.

New research from the University of Bath shows that people with higher IQs make fewer mistakes when predicting life events. This improves decisions, leading to better outcomes in health, wealth, and relationships.

The study was focused on data from 3,946 older adults in England. Each participant guessed their chances of living to a certain age. These guesses were then compared to national life expectancy data.

Forecast errors – meaning the difference between estimated and actual chances – were much higher among people with lower IQs. In fact, the least intelligent 2.5% made errors that were more than twice as large as those in the top 2.5%.

How IQ supports better decisions

“Accurately assessing the probability of good and bad things happening to us is central to good decision-making,” said Chris Dawson, the study’s author and a professor of economics and behavioral science.

The study measured both IQ scores and genetic traits related to intelligence and education. These traits are captured by polygenic scores, which reflect a person’s inherited tendency toward intelligence or educational achievement.

Smarter people not only guessed more accurately, they also showed less variation in repeated guesses. In contrast, low-IQ individuals were more inconsistent and showed wide variability when asked the same question multiple times.

Smart minds predict precisely

The study relied on a variety of cognitive tasks. These included memory recall, number puzzles, verbal fluency, and object naming. From these, researchers built a general IQ score, referred to as phenotypic IQ.

The team also analyzed participants’ genetics using polygenic scores. Scores for both IQ and educational attainment helped reveal how much decision accuracy could be linked to DNA.

People with a higher polygenic score for IQ made smaller errors. The same held true, though to a lesser extent, for people with higher scores for educational attainment. But genetic influences alone do not explain everything.

Low IQ increases inconsistency

Forecasting errors come from two main sources: bias and noise. Bias involves consistently wrong guesses. Noise refers to inconsistent answers by the same person over time.

Low-IQ individuals performed poorly on both fronts. The average standard deviation in their repeated guesses was far higher. According to the data, those with high IQ had a standard deviation of 12.08. Those with low IQ had a deviation of 19.46.

“Probability estimation is the most important aspect of decision-making, and people who struggle with this are at a distinct disadvantage,” Dawson said.

Smarter choices, better lives

Forecasting affects daily choices like savings, retirement, and investment. Mistakes here can lead to poor financial outcomes and lower economic welfare.

Even people with high IQs make errors. However, they tend to rely more on slow, logical thinking. People with lower IQs often use mental shortcuts or respond emotionally.

Environmental factors can also throw off predictions. For example, bad weather might impact how someone judges unrelated risks. This introduces noise, which damages decision quality.

Thinking clearly in uncertain times

Professor Dawson suggests making information more digestible. “Explicitly stating probability estimates on information relating to health and finance could help people prone to forecasting errors to make more informed, accurate decisions,” Dawson noted.

This might include clearer labels, simplified financial tools, or personalized health messages. These changes can help people make better decisions regardless of their IQ.

“IQ is already known to predict health, wealth, income, occupational status and educational attainment and this research highlights one possible channel through which people with a lower IQ do worse on all these outcomes,” he said.

Smarter predictions are not about having more facts. They are about thinking clearly and acting wisely in uncertain situations.

The study is published in the Journal of Personality and Social Psychology.

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