Poverty can affect a person’s mental abilities and lead to mistakes and bad decisions.
Dealing with issues related to poverty can drain one’s mental resources, leaving less capacity for other tasks. As a result, people with limited means may be more likely to engage in behaviors that worsen their situation.
In a new study, published Aug. 30 in the journal Science, an international team of researchers examined whether poverty itself can reduce cognitive function and lead to mistakes and bad decision making.
In a series of experiments, researchers found that urgent financial concerns had an immediate impact on the performance of low-income individuals on mental tests. In the laboratory, the effect on cognitive performance was similar to what would happen after an entire night without sleep. The effect in the field test was three-quarters that size.
The researchers emphasize that the mental abilities measured by these tests are, in fact, relevant to the real-world. “Our limited mental bandwidth is what we use for our thinking, remembering, and problem solving,” says Eldar Shafir, Ph.D., a psychology professor at Princeton University and co-author of the upcoming book, Scarcity: Why Having Too Little Means So Much. “High cognitive load makes us forget more, resist temptation less, show slower response times, and think less effectively.”
“For many years, cognitive psychologists have studied mental capacity, cognitive load, etc., but for them a brain is a brain—no particular interest in which group is studied,” says Shafir. “Economists have long studied poverty, but without bringing in behavioral and cognitive research. Here, finally, we study a classic economic problem with the tools provided by cognitive psychologists.”
Researchers tested the effect of poverty on brainpower in a series of experiments.
First, they used four scenarios to trigger thoughts about financial concerns in 400 volunteers recruited from a mall in New Jersey. Participants were divided into two groups—“rich” and “poor”—based on their income and family size.
In one scenario, participants were asked to think about how they would deal with car repairs—paying up front, borrowing money to cover the cost, or putting it off. Each scenario was either “easy” or “hard”—with the repairs costing $150 or $1,500, respectively.
While the volunteers pondered the financial problem, they completed two mental tests—fluid intelligence (part of the IQ test) and cognitive control (the ability to match your actions to your goals).
The poor and rich groups did equally well when confronted with the “easy” scenario. However, lower-income people did worse on the mental tests when dealing with the “hard” scenario.
To confirm the effect of financial concerns on the brain in the real-world, researchers recruited 464 sugarcane farmers in India. Paid once a year for their crops, these farmers had very little money before the harvest but were relatively rich immediately afterwards.
Using similar mental tests, researchers found that farmers did worse before the harvest, while they were under financial strain. This was true even when researchers took into account other factors that might affect performance, such as stress, nutrition, work effort, and available time.
Given the drain on cognitive bandwidth faced by people coping with poverty, government agencies and support staff can assist low-income groups with brain-intensive activities, such as filling out paperwork, making financial decisions, managing time, or completing education programs.
In this study, the researchers defined “poverty” as a gap between a person’s needs and available resources. Poverty, though, can sometimes extend beyond the physical and can affect people of all income levels.
“There is a mental component, especially to what you feel you ‘need,'” says Shafir. “Not having certain things creates a clear sense of being poor in some contexts, but not in others.”