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Burden of Poverty

Lacking money or time can lead one to make poorer decisions, possibly because poverty imposes a cognitive load that saps attention and reduces effort. Mani et al. (p. 976; see the Perspective by Vohs) gathered evidence from shoppers in a New Jersey mall and from farmers in Tamil Nadu, India. They found that considering a projected financial decision, such as how to pay for a car repair, affects people's performance on unrelated spatial and reasoning tasks. Lower-income individuals performed poorly if the repairs were expensive but did fine if the cost was low, whereas higher-income individuals performed well in both conditions, as if the projected financial burden imposed no cognitive pressure. Similarly, the sugarcane farmers from Tamil Nadu performed these tasks better after harvest than before.

Abstract

The poor often behave in less capable ways, which can further perpetuate poverty. We hypothesize that poverty directly impedes cognitive function and present two studies that test this hypothesis. First, we experimentally induced thoughts about finances and found that this reduces cognitive performance among poor but not in well-off participants. Second, we examined the cognitive function of farmers over the planting cycle. We found that the same farmer shows diminished cognitive performance before harvest, when poor, as compared with after harvest, when rich. This cannot be explained by differences in time available, nutrition, or work effort. Nor can it be explained with stress: Although farmers do show more stress before harvest, that does not account for diminished cognitive performance. Instead, it appears that poverty itself reduces cognitive capacity. We suggest that this is because poverty-related concerns consume mental resources, leaving less for other tasks. These data provide a previously unexamined perspective and help explain a spectrum of behaviors among the poor. We discuss some implications for poverty policy.

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References and Notes

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Published In

Science
Volume 341 | Issue 6149
30 August 2013

Submission history

Received: 19 March 2013
Accepted: 23 July 2013
Published in print: 30 August 2013

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Acknowledgments

Authors’ names are listed alphabetically; the authors contributed equally to this work. The authors gratefully acknowledge support from the National Science Foundation (award SES-0933497), the John Simon Guggenheim Memorial Foundation, the International Finance Corporation, and the Institute for Financial Management and Research Trust. S. Krishnan, D. Mackenzie, and especially D. Bulla provided able research assistance. The authors declare no conflict of interest.

Authors

Affiliations

Anandi Mani
Department of Economics, University of Warwick, Coventry CV4 7AL, UK.
Sendhil Mullainathan* [email protected]
Department of Economics, Harvard University, Cambridge, MA 02138, USA.
Eldar Shafir* [email protected]
Department of Psychology and Woodrow Wilson School of Public and International Affairs, Princeton University, Princeton, NJ 08540, USA.
Jiaying Zhao
Department of Psychology and Institute for Resources, Environment and Sustainability, University of British Columbia, Vancouver, British Columbia V6T 1Z4, Canada.

Notes

*
Corresponding author. E-mail: [email protected] (S.M.); [email protected] (E.S.)

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