Understanding quantitative relationships really helps in life!

Source: "Subprime borrowing and innumeracy / The fear of all sums: The role of mathematics in America’s housing bust," The Economist, May 13th 2010

I quote from the article:

Even accounting for a host of differences between people—including attitudes to risk, income levels and credit scores—those who fell behind on their mortgages were noticeably less numerate than those who kept up with their payments in the same overall circumstances. The least numerate fell behind about 25% of the time. For those who did best on the test, the number of payments they missed was almost 12%. A fifth of the least numerate group had been in foreclosure, but only 7% of those who were more numerically adept had.

Surprisingly, the least numerate were not making loan choices that differed much from their peers. They were about as likely to have a fixed-rate mortgage as the more numerically able. They did not borrow a larger share of their income. And loans were about the same fraction of the house’s value.

Here is the source research quoted in the article published by The Economist.

This is the first article I recall reading indicating that numeracy really makes a difference in ones success in real life. The link seems obvious, but not all that is obvious is true.