Practical Validity
The practical validity of g as a predictor of educational, economic, and social outcomes is more far-ranging and universal than that of any other known psychological variable. The validity of g is greater the greater the complexity of the task.
A test's practical validity is measured by its correlation with performance on some criterion external to the test, such as college grade-point average, or a rating of job performance. The correlation between test scores and a measure of some criterion is called the validity coefficient. One way to interpret a validity coefficient is to square it to obtain the variance accounted by the test. For example, a validity coefficient of .30 corresponds to 9 percent of variance explained. This approach has, however, been criticized as misleading and uninformative, and several alternatives have been proposed. One arguably more interpretable approach is to look at the percentage of test takers in each test score quintile who meet some agreed-upon standard of success. For example, if the correlation between test scores and performance is .30, the expectation is that 67 percent of those in the top quintile will be above-average performers, compared to 33 percent of those in the bottom quintile.
Read more about this topic: g Factor (psychometrics)
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