Individual Differences in Numeracy and Cognitive Reflection, with Implications for Biases and Fallacies in Probability Judgment

Abstract

Despite evidence that individual differences in numeracy affect judgment and decision making, the precise mechanisms underlying how such differences produce biases and fallacies remain unclear. Numeracy scales have been developed without sufficient theoretical grounding, and their relation to other cognitive tasks that assess numerical reasoning, such as the Cognitive Reflection Test (CRT), has been debated. In studies conducted in Brazil and in the USA, we administered an objective Numeracy Scale (NS), Subjective Numeracy Scale (SNS), and the CRT to assess whether they measured similar constructs. The Rational-Experiential Inventory, inhibition (go/no-go task), and intelligence were also investigated. By examining factor solutions along with frequent errors for questions that loaded on each factor, we characterized different types of processing captured by different items on these scales. We also tested the predictive power of these factors to account for biases and fallacies in probability judgments. In the first study, 259 Brazilian undergraduates were tested on the conjunction and disjunction fallacies. In the second study, 190 American undergraduates responded to a ratio-bias task. Across the different samples, the results were remarkably similar. The results indicated that the CRT is not just another numeracy scale, that objective and subjective numeracy scales do not measure an identical construct, and that different aspects of numeracy predict different biases and fallacies. Dimensions of numeracy included computational skills such as multiplying, proportional reasoning, mindless or verbatim matching, metacognitive monitoring, and understanding the gist of relative magnitude, consistent with dual-process theories such as fuzzy-trace theory. © 2011 John Wiley & Sons, Ltd.