A recent Demography article by Khanam and Nghiem (2016), entitled “Family Income and Child Cognitive and Noncognitive Development in Australia: Does Money Matter?,” concluded that “family income is significantly associated with children’s cognitive skills” (Khanam and Nghiem 2016:597). For a 1 standard deviation difference in logged family income, the authors’ estimates were a 0.29 standard deviation increase in scores on the Peabody Picture Vocabulary Test (PPVT), a 0.26 standard deviation increase for Matrix Reasoning (MR) scores, and increases of 0.24 and 0.23 of a standard deviation for Year 3 numeracy and literacy scores (respectively) in the National Assessment Program – Literacy and Numeracy (NAPLAN) (Khanam and Nghiem 2016:616). The authors obtained their estimates not from standard regression procedures but from the generalized method of moments (GMM) estimator.
The purpose of this commentary is to provide evidence that these estimates are not plausible. Therefore, the conclusion that...
