Two Studies Are Conducted of the Relationship Between SAT Scores

question 32

Essay

Two studies are conducted of the relationship between SAT scores and subsequent earnings. In Study A, students are the units of analysis and it is found that college students who had higher SAT scores have higher earnings in subsequent jobs. Write a statement about this finding that would be reductionist. Explain why the statement is reductionist. In Study B, colleges are the units of analysis and it is found that colleges in which the average student SAT score was higher also have, on average, higher earnings among their graduates. Write a statement about this finding that exemplifies an ecological fallacy. Explain what makes this statement an ecological fallacy.

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Definitions:

Current Balance

The sum of the trade balance, net income from abroad, and net current transfers.

Behavioral Economists

Scholars who study the effects of psychological, cognitive, emotional, cultural, and social factors on economic decisions of individuals and institutions.

Marginal Disutility

The additional dissatisfaction or negative utility gained by consuming or producing one additional unit of a good or service.

Status Quo

The existing state of affairs; in prospect theory, the current situation from which gains and losses are calculated.