This chapter examines the use of statistics in assessing the relationship between phenotypes and genotypes. It proposes a simple data-generating process in which the phenotype of children depends on their genotype and the phenotype of their parents. The autoregressive coefficient is Francis Galton’s “beta” that expresses the causal effect of parents on their children’s outcome. Heredity is modeled by assuming that a child’s genotype is dependent on his/her parents’ genotypes and on a random draw from the gene pool. The data-generating process consists of two related first-order autoregressive processes referred to as the AR (2) model, which becomes an AR (3) model if the environments of children are correlated with their parents’ environments (in terms of religion, culture, geography, professions, etc.). The AR (2) and AR (3) models are used to solve for the transmission of inequality between generations. The chapter concludes with a discussion of other metrics for measuring inequality, including the Gini coefficient.
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