Predicting Income

A person’s income is determined by many factors, but which are the best predictors?

To answer our question, we used the data from the General Social Survey. We modeled income, a continuous outcome variable, as a linear function of education (in years completed), race, sex and intelligence (as proxied by the “wordsum” test). As the coefficient plot below shows, individuals with higher incomes tend to be male, more educated, White and with higher “wordsum” scores.