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The Cognitive Costs of Poverty

April 12, 2017


Anyone who has ever struggled with poverty knows how extremely expensive it is to be poor.
-James Baldwin


When thinking about poverty many people are critical of the short-term decisions that poor people make. People may question nutritional, financial, and job choices as myopic or counter-productive. However, many people fail to grasp the cognitive strain of poverty that makes it far tougher to plan for the long-term. Fortunately, from the field of Decision Science are two studies that help us understand these hidden mental costs.


The Marshmallow Study


In the original marshmallow study, researchers at Stanford told young children they could eat the marshmallow in front of them or wait a period of time and have two marshmallows. Following the subjects of this impulse control test showed that the ones who held out longer performed better in school.


However, researchers at Rochester put a twist on the old experiment. In this case, they presented kids with a broken set of crayons, but told them if they waited to use them the experimenter would come back with new crayons. In the reliable condition, the experiments did just that, but in the unreliable condition, the experimenters apologized and told the kids they would have to use the broken crayons. Then the experimenters repeated the original marshmallow test. They found that kids in the reliable condition held out four times longer than those in the unreliable condition.


These results showed that willpower and patience are also learned from one’s environment. If people are constantly disappointed and made to feel that their efforts are futile, then they behave less patiently and are willing to take a smaller reward now rather than trusting in an uncertain larger reward later.


Buying Time


Professor Eldar Shafir of Princeton explains that a cognitive shift occurs under conditions of scarcity, whether the individual lacks food, money, or time. He tested Princeton undergraduates with a “Family Feud” style game and assigned participants to a group that had 15 seconds (low time) or 50 seconds (high time) to answer questions. Participants in each condition could borrow time: one additional second now at the cost of two seconds later. Participants in the low time condition borrowed more frequently and ultimately scored worse than their high time peers.


This study demonstrated that when people are under resource constraints they sacrifice better long-term outcomes to meet their needs in the short term. In practice, this may mean taking out a payday loan to cover rent despite the higher interest rate associated with it.


Through research and experiments like these, we can better understand our own behaviors and gain a measure of empathy for those in less fortunate circumstances. These insights can also allow us to come up with more effective and just policies for combating poverty.







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