“Some Consequences of Having Too Little”, 2012-11-02 (; backlinks; similar):
[Note: ‘scarcity studies’ in general are biased & overestimate effects; et al 2012 weakened in that & et al 2019.]
Poor Choices: 2 categories of reasons for why poor people make economically unsound choices, such as obtaining a payday loan at an extraordinarily high rate of interest, reflect, first, the environment: Poor people are more likely to be living in poor neighborhoods with higher rates of crime and lower rates of social services. Second, they reflect the individual: People are poor in part because of their own psychological dispositions toward impatience and impulsiveness. For both cases, obtaining causal evidence in controlled experiments has been challenging. et al 2012 (p. 682; see the Perspective by Zwane) propose a third category of reasons whereby being poor exerts a bias on cognitive processes and provide evidence for it in laboratory experiments performed in scenarios of scarcity.
Poor individuals often engage in behaviors, such as excessive borrowing, that reinforce the conditions of poverty. Some explanations for these behaviors focus on personality traits of the poor. Others emphasize environmental factors such as housing or financial access.
We instead consider how certain behaviors stem simply from having less. We suggest that scarcity changes how people allocate attention: It leads them to engage more deeply in some problems while neglecting others.
Across several experiments, we show that scarcity leads to attentional shifts that can help to explain behaviors such as overborrowing.
We discuss how this mechanism might also explain other puzzles of poverty.
View PDF: