Regression vs. Novometric Analysis Predicting Income Based on Education

Paul R. Yarnold

Optimal Data Analysis, LLC

This study compares linear regression vs. novometric models of the association of education and income for a sample of 32 observations. Regression analysis identified a relatively strong effect (R-squared=56.4), but only 25% of point predictions fell within a 20% band of actual income. Novometric analysis identified a strong effect (ESS=81.7%) which was stable in jackknife validity analysis: the model correctly classified 91.7% of observations earning income less than $12,405, and 90.0% of those earning greater income. For people with an income which is less than the optimal threshold, and for those earning greater income, factors other than the number of years of education influenced earned income.

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