Thrift Texas-style, the most intelligent state in America, greed in the vestry, and other matters. STATE SMARTS

(FORTUNE Magazine) – Which of the 50 states is the smartest? Which are in the top ten? Provocative questions, eh? Make a great lead, no? Maybe that is why the questions leaped to mind the other day when we began cleaning up a mountain of paper on a certain table in the corner and ended up perusing a previously unperused ten- month-old press release issued by the College Board. The board, a national nonprofit organization whose members are high schools and colleges, is mainly famous for the role it plays in annually terrorizing a million-odd high school seniors with the Scholastic Aptitude Test. In addition to serving up the test, the board generates an avalanche of data on the results. It is the central source for those endlessly analyzed numbers showing a severe decline in average scores during the Sixties and Seventies, followed by a weak and partial recovery in the early Eighties. (The combined verbal- math scores have averaged 906 in recent years, vs. around 980 in the early Sixties.) Every year the board breaks down the scores by sex, ethnicity, family income, the testees' parents' educational background, and various other indicators -- including the testees' states. To be sure, the board does not like journalists to play with the state data. Adjoining them on the press release, and displayed somewhat more prominently than the warning label on cigarette packs, is this stern admonition: ''Making comparisons of states, or ranking them, on the basis of SAT scores alone is invalid and strongly discouraged by the College Board.'' But, of course, the Keeping Up social policy desk tends to be just egged on by that kind of talk. You are possibly wondering what state SAT scores can tell us about a state's average intelligence level. Actually, they can tell us a lot. Many psychometricians will tell you that the SAT is a fair proxy for an IQ test. Correlations between SAT scores (especially the verbal scores) and IQ levels have been found to be quite high; the data suggest, for example, that an SAT verbal score of 500 (the scores are scaled from 200 to 800) is a rough equivalent of an IQ of 115 (where 100 is the norm). Robert Klitgaard's Choosing Elites, a scholarly work published three years ago, mentions that SATs ''are closely related to intelligence tests.'' Klitgaard quotes Henry Chauncey, a former president of the Educational Testing Service (which designs the tests for the College Board), as equating SAT scores and IQ scores. It is true, as the College Board insists, that you cannot just take one state's average SAT score and compare it with another state's average. The core difficulty here is that the states vary enormously in the educational programs and cultural pressures that put students on the road to college. In states where only an elite few take the SATs, average scores will obviously be higher. The combined math-verbal score for Mississippi last year averaged 1,008, well above the New York average of 894. But only 3% of Mississippi high school graduates took the test, vs. about two-thirds of the New York kids. A regression we have just performed with the aid of Lotus 1-2-3 tells us that 72% of the variability in state scores is accounted for by the proportion of state kids taking the test. You can, however, adjust for this variability. You do this by creating a scatter chart in which each state's average score is related to its proportion of test takers. Then with 1-2-3's assistance, you produce a trend line that shows an ''expected'' SAT score for each state -- the expectation being based on the proportion of the state's kids who take the test. If you are using 1-2-3 with a color monitor, the overall effect is quite aesthetic, especially if you like seeing the trend line in magenta (a color strongly favored by Lotus). The question then gets to be, not whose absolute scores are highest, but whose scores rise farthest above the magic magenta line. Unfortunately, the list we are about to present is not exactly up to date. It sounds incredible, but the last year for which you can get complete and authoritative state breakdowns on the proportion of high school graduates taking the test is 1982. Using those breakdowns in combination with 1982 SAT scores, we find Iowa on top. When we use the same numbers in combination with 1987 scores (the 1988 data will be released next month), we still find Iowa on top. So the Hawkeye State seems to be No. 1. Based on 1987 scores, it is followed by (2) Connecticut, (3) South Dakota, (4) New Hampshire, (5) Massachusetts, (6) North Dakota, (7) Kansas, (8) Utah, (9) New Jersey, and (10) Rhode Island. We congratulate them all and thank the College Board for making this calculation possible.