Attention Scarcity, Ego Depletion and Poverty

by on November 27, 2012 at 7:33 am in Economics, Political Science, Science | Permalink

Poor people often do things that are against their long-term interests such as playing the lottery, borrowing too much and saving too little. Shah, Mullainathan and Sahfir have a new theory to explain some of these puzzles. SMS argue that immediate problems draw people’s attention and as people use cognitive resources to solve these problems they have fewer resources left over to solve or even notice other problems. In essence, it’s easier for the rich than the poor to follow the Eisenhower rule–“Don’t let the urgent overcome the important”–because the poor face many more urgent tasks. My car needed a brake job the other day – despite this being a relatively large expense I was able to cover it without a second’s thought. Compared to a poorer person I benefited from my wealth twice, once by being able to cover the expense and again by not having to devote cognitive resources to solving the problem.

SMS test the theory with small experiments in which people are asked to play simple games. Poverty is simulated by giving some players fewer game resources. Players in the “poverty” conditions are then shown to devote more attention to the current round and less attention to future rounds, including borrowing more from future rounds. In perhaps the most surprising experiment, SMS have players play a family feud game with and without hints:

Experiment 5 offers more direct support for
the notion that scarcity creates attentional neglect.
One hundred thirty-seven participants played
Family Feud. Some participants could see previews
of the subsequent round’s question at the
bottom of the screen; others could not. We expected
that poor participants would be too focused
on the demands of the current round to
consider what comes next, whereas rich participants
would be able to consider future rounds
and whether moving on was beneficial. All participants
could borrow with R = 3. As predicted,
poor participants performed similarly with previews
(–0.02 T 0.87) and without (0.02 T 1.11),
while rich participants performed better with previews
(0.32 T 0.98) than without (–0.35 T 0.92)
[scarcity × borrowing interaction, F(1, 133) =
4.29, P < 0.05, hp
2 = 0.03; for unstandardized
scores, see table S5].

One concern might be that
the poor did not have enough time to consider
the previews. But the experiments above found
that the poor were using too much; they were
overborrowing. Their performance in the nopreview
condition left substantial room for improvement.
Even if poor participants had used
some of the borrowed time to consider the previews
and move on sooner, they could have improved.
That is, the previews benefited the rich
by helping them save more; they could have benefited
the poor by helping them borrow less. But
it appears they were too focused on the current
round to benefit.

Thus, SMS show that poverty (over)-stimulates attention to urgent problems which results in less attention given to important problems–thus, reduce some day to day urgencies and people may become more open to devoting attention to important problems like deworming or hygiene or paying the rent which would in the not-so-long-run result in greater benefits.

Crucially, notice that SMS’s experiments are about the effect of poverty not about the poor. In other words, at least some of our discussion of the poor may suffer from the fundamental attribution error.

1 Andrew' November 27, 2012 at 7:55 am

I always wonder how much they use just working cash flow angles. For example, I’ve heard it a thousand times but I have no idea what “60 days same as cash means.” I don’t think it’s the poor person’s version of “time is money.”

2 Cliff November 27, 2012 at 9:15 am

I’m not saying the conclusion is necessarily wrong, but I don’t really get the connection between running out of time in family feud and being poor in real life. Is it really true that there are so many desperately urgent problems for the poor that they run out of ego and stop being able to make good decisions? I mean, okay, your car breaks down and you have to figure out how to get to work. But there isn’t a clock over your head ticking with 60 seconds on it. And that hardly happens every day.

3 Dan Weber November 27, 2012 at 11:34 am

I had both a home (computer) server and a hot water heater break on the same day. I was not able to devote as much attention as I would have liked to shopping for the best heater since I had to get the problem solved quickly because I had another one to solve. I also got the extended warranty and service plan which I might not have normally done.

(OTOH, I didn’t have to fret about spending another $60 on that warranty. As is, I made finding a unit with the longest warranty a priority so it will at least a decade before I need to worry about it again.)

4 albatross November 27, 2012 at 11:45 am

Introspection is an imperfect way to learn about how your mind works, but this seems very plausible to me. I have three kids, and I definitely notice differences in how well my wife and I handle longer-term planning, or even stuff like planning meals and getting the bills paid on time, when (say) the kids get sick, or a couple of them have demanding extracurricular events in the same week. Partly, the problem is attention and mental energy, but partly, it’s just time when you’re not doing something else–in order for me to think through how to solve some problem, I need a few minutes when I’m not rushing to do something else, cooking dinner, breaking up a fight, etc.

5 mulp November 27, 2012 at 12:33 pm

You must get to work on time or you are fired. Your car won’t start, and you have 15 minutes to make the trip that takes 10 minutes after your kids are picked up by the school bus. Quick, solve your problem with the $3.57 you have left for the week.

Poor people have old cars. Old cars are unreliable. A good week is only worrying about car problems. A bad week is losing your job because your car broke down. Transportation is probably the biggest daily problem for the poor.

6 anon November 27, 2012 at 2:21 pm

I mean, okay, your car breaks down and you have to figure out how to get to work. But there isn’t a clock over your head ticking with 60 seconds on it. And that hardly happens every day.

It appears you have never been cash poor. At least not recently.

7 mw November 27, 2012 at 9:20 am

Cliff–the issue of whether it’s a question of the timer is addressed separately in experiment 1, where the poor actually spend less time playing than the rich, but then in a subsequent task that is the same for rich and poor, the poor do worse, presumably because they are “drained” from being poor in the first game. The evidence for that is that they spend more time, and perform more accurately and therefore allot more attention, for each of their “shots” in the angry birds game, due to the scarcity of shots.

8 Peter Schaeffer November 27, 2012 at 11:56 am

Anyone who knows the slightest thing about poverty in America would laugh at this. The poor in America lack many things, but time is not one of them. They aren’t called the “idle poor” for nothing. Here are a few typical statistics

From “NEWSONE For Black America”

“California — Our community may need to step away from the TV screen a bit because a recent Nielsen study shows we are watching more TV than anyone in the country. According to EURweb, in November 2010, when the data were compiled, African Americans used their TVs an average of 7 hours, 12 minutes each day — above the U.S. average of 5 hours, 11 minutes. Asians watched TV the least, at just 3 hours, 14 minutes a day on average. African Americans used DVD players and video game consoles more than average, but whites were more likely to use DVRs. Some 40 percent of white families own DVRs, which is higher than average.”

From “White Kids Are Losing the TV-Watching Race”

“Historically, scholars have been aware of differences in the amount of time that White and minority children spend with media, especially TV. But last year’s Generation M2 study indicated a large increase in the amount of time both Black and Hispanic youth are spending with media, to the point where they are consuming an average of 13 hours worth of media content a day (12:59 for Blacks and 13:00 for Hispanics), compared with about eight and a half hours (8:36) for White youth, a dfference of about four and a half hours a day. In recent years, this gap in media use between White and Black youth has doubled, and between White and Hispanic youth it has quadrupled.”

Try something called “Google” as a sanity check before posting.

9 Not as Racist November 27, 2012 at 12:38 pm

As much as you may think equating “black and hispanic” with “poor” is helpful, I’m going to go ahead and guess that the white poor watch as much/more TV than the black poor (and same goes for the rich).

10 Peter Schaeffer November 27, 2012 at 5:21 pm


” I’m going to go ahead and guess that the white poor watch as much/more TV than the black poor (and same goes for the rich).”

That would be my guess as well. The data I found online suggested as much. There is a clear income effect (the poor watch more TV). I haven’t seen any data that measured TV watching by race controlling for income.

11 mulp November 27, 2012 at 12:46 pm

How does a TV get you from where you live to a job 10-20 miles away if you don’t have a car?

Could you afford a reliable car on a job paying minimum wages for a 35 hour part-time job with a rotating work schedule (say working in food service only during the meal rush, or working at Wal-Mart on the just-in-time worker scheduling system they use which spreads work over 24 hour days). Do you think buses run 24 hour schedules outside a few big metro areas?

12 Peter Schaeffer November 27, 2012 at 5:31 pm


“How does a TV get you from where you live to a job 10-20 miles away if you don’t have a car?”

It doesn’t. By that vast amount of time the poor spend watching TV, demonstrates that time scarcity doesn’t account for low quality decision making. Note that 7 hours of TV is equivalent to $50 day at the minimum wage. That’s a bit over $1000 per month without the EITC. A cheap car costs around $0.35 a mile to operate. That puts a 30 mile (round-trip) commute at around $10.50 per day.

13 Robert Platt Bell November 29, 2012 at 9:13 am

I don’t think Mr. Schaeffer is being racist, as the poverty rates among blacks and hispanics are historically higher than among whites.

Television is a huge time bandit, and also a great programmer of poor normative social cues. If you watch television, your brain is programmed (quite literally, since it is an neural network) with bad ideas. Payday loans, rent-to-own furniture, new car sales (or worse, leases), as well as poor food choices are all hammered in the advertising – and also touted as “norms” among the characters in the “fictional” programs.

The more people watch this, the more they accept the idea that it is OK to spend every evening in front of the TeeVee, sending out for Pizza, and then pining for a new SUV on low monthly payments (the idea that the poor, in America, don’t have cars is somewhat laughable).

And of course, just the cost of watching TeeVee is staggering – $100 a month cable bill can come to $1200 a year, which if invested at even a modest rate of return, can be over $100,000 in your IRA at retirement.

Television is a choice – a bad choice. And if there is one common denominator about poverty that I see, is that it is a series of bad choices, usually strung together.

14 anon November 27, 2012 at 2:23 pm

Not all poor are “idle.”

Have you been cash poor as an adult? Do you know any working poor people?

15 Peter Schaeffer November 27, 2012 at 5:47 pm

“Not all poor are “idle.””

Of course not. However, the poor work much less than any other group. See “Working-Family Gibberish”

“The table also shows the average weekly number of hours worked by the working-age adults in each quintile. (Focusing on working-age adults controls for the different number of children and retirees in each quintile.) Hours worked differ substantially across income levels. Adults in the lowest quintile work an average of only 14.4 hours per week, less than one-half of a typical 40 hour workweek. By contrast, adults in the top quintile work an average of 34.6 hours per week. This difference in hours worked indicates that the true working people are not predominantly the low- and middle-income people as some politicians would have us believe. Instead, the people in the top quintile actually work the most hours per week rather than enjoying lives of leisure. Of course, political silliness notwithstanding, there is nothing surprising about this finding. More hours worked, after all, lead to more income thereby placing the harder-working household into a higher income bracket.”

“Have you been cash poor as an adult?” – For years.

“Do you know any working poor people?” – Many.

16 Harlan November 28, 2012 at 7:59 am

Peter, I’m not sure that _average_ hours worked is a useful statistic here. Obviously some poor people don’t work, and more poor people don’t work than rich people. But it’s also a fact that there are many, many working poor people, often working two or three part-time jobs for near-minimum wage. That’s the group for whom this attentional data is relevant. For that set of tens of millions of people in the US, the stress around having to continually make difficult financial decisions minimizes their ability to make good long-term decisions that would help get them out of poverty.

17 Eric H December 9, 2012 at 3:42 pm

Not sure I buy this much. Besides watching TV, the poor in my neighborhood spend lots of time walking to/from stores, bus stops, etc., standing in lines, and a number of other things that I don’t because I don’t have to. There was a time when there was no question that I would have to do my own maintenance or do without; that is no longer necessary. These things multiply when you face issues like doctor visits, school P-T meetings, etc. Then there was the time when my wife was a single mother and had only her bicycle to get around while dealing with a son with special needs … and someone stole the bicycle. I think you may be first in demonstrating what Alex noted in his last paragraph.

18 Trailsplitter November 27, 2012 at 7:56 am

It is because of posts like this that I love this blog. Thanks Alex!

19 +1 November 27, 2012 at 8:51 am

Came here to say the same exact thing…

(Now if only there was a button that would let me agree or disagree with your comment, without having to make up my own…)

20 Bill November 27, 2012 at 8:14 am

No surprise here. You can also look at other effects of socio economic status on fostering child aspirations: if you look at low SES parents, they do not encourage their children to aspire to college because of its costs and their lack of information about college financing.

When you look at it from a systems perspective, the rich get richer and the poor get poorer, and the issue is how you intervene to stop the poor from getting poorer.

21 TMC November 27, 2012 at 7:58 pm

You need to go to college to not be poor?

22 The Anti-Gnostic November 27, 2012 at 8:23 am

So the problem is just lack of money, which means we can fire all the welfare bureaucrats and give the poor a check for $50K/yr.

23 mw November 27, 2012 at 9:01 am

No. Unless you’re going to give enough money to truly remove scarcity from the equation, the whole freakin point is that switching from “paternalistic” programs that set some behavioral norms to the “freedom” of letting the poor allot all of their own spending will make things *worse*. And we don’t have enough money to remove scarcity from every family’s equation.

24 Tangurena November 27, 2012 at 8:42 pm

Well, it is clear that you didn’t read the paper. But then, this paper has been pointed out on a number of other places, and those folks didn’t read the paper either.

25 Steve Sailer November 27, 2012 at 8:29 am

“I’ve been rich and I’ve been poor. Believe me, honey, rich is better.” — Sophie Tucker

26 Floccina November 28, 2012 at 2:31 pm

I have a different twist on quote of Sophie Tucker’s.

I’ve been rich and I’ve been poor and rich is better but not that much better.

Since many a person who has never been poor can say they are poor I will make my claim concrete:

I went from still earning just above minimum wage at age 28 to, at age 50, having income of over $240K per year.

BTW: If I could go back to being age 22 and earning minimum wage I would take it in a second. It is much better to 22 years old and earning minimum wage than being 55 and earning over $2000K per year.

So should older people who have more problems with health and less time experience the poor decision making?

So do the folks in Kiryas Joel, New York have the same problem.

Low earnings is one thing not having a cushion is generally mostly folly. In the USA if your health is not really bad and you are not crippled, blind mentally ill, etc, you can build a cushion on minimum wage. You can also have a plan for example if my car breaks down I will take a bike – most low paying jobs you can show up for a little sweaty.

27 liberalarts November 27, 2012 at 8:39 am

Beyond this controlled experiment, an overlooked value of being rich (or really just solidly upper middle income) is that your extended family is also much more likely to be at least middle class. Poor people have poor extended family members who are also at much greater risk of having an urgent need (broken down cars, unpaid daycare, past due heating bills, divorce lawyers, etc.) and who are always asking for family help. Thus, as a poor person you can choose between consuming less now and possibly having a family member ask for it later or spend now and then have no money when that extended family member has yet another urgent crisis. Sure, needy family members cross the socioeconomic spectrum, but if you have ever had a friend who rose out of poverty, you probably have seen what I describe in play. No extended family member of mine has ever asked me for a dime, which improves my ability to make optimal savings and borrowing decisions.

28 Slocum November 27, 2012 at 9:18 am

Absolutely. There simply must be additional factors other than the immediate, personal financial situation. As you say, one of them is surely family/community context. Another is probably ingrained thought/behavior patterns developed by growing up in a poor vs wealthy family and community. And then there are clearly individual differences. I think we’re all aware that at given levels of wealth and income there are prudent savers and impulsive spenders, and that for some people deferred gratification comes quite naturally and easily while for others it requires great effort (and that probably only after some sobering crises).

29 Steve Sailer November 27, 2012 at 10:25 am

Conversely, having relatives you can borrow from is nice.

30 liberalarts November 27, 2012 at 10:33 am

Actually, my brother and I occasionally borrowed from each other during our young, human capital accumulation phase. But we always set it up as an interest bearing note, and there was never the expectation that late payments or nonpayments were acceptable. In other families, loan repayment seems to be an optional thing.

31 albatross November 27, 2012 at 11:49 am

Along with being able to borrow money for a down payment or something from family members, there’s also the knowledge that they are there, providing a last-ditch safety net if, say, you lose your job and can’t find another one. Moving your family into your in-laws’ basement is a very bad outcome, but it’s less bad than moving into a homeless shelter. And knowing it’s there is both reassuring, and may make you willing to take at least some more risks.

32 Bernard Guerrero November 27, 2012 at 2:34 pm

+1. See also informal lending networks (and the lack thereof in some communities, which keeps me in business.)

33 Rahul November 27, 2012 at 8:41 am

Isn’t the outcome natural though? I mean zero funds is a hard limit. The poor have to contend with not letting their balances swing into negatives.

Long term utility maximization only works under the constraint of never letting your balance ever slip below zero. It’s rational that the poor use different strategies than the rich.

34 mw November 27, 2012 at 8:54 am

There’s nothing “rational” about limited attention and energy–it’s a fundamental constraint on human reasoning and behavior and one that’s completely ignored in all “utility maximization” mumbo jumbo.

35 Andrew' November 27, 2012 at 10:37 am

You always start with the simplest model. See what that explains, test for counterfactuals. Adjust the model. This might be a minor adjustment. Except that it’s a single paper in a laboratory experiment. Such experiments have to be done, but you’d never claim one paper from one group completely disproves a model. Since I’m not an economist, I assume the rational model explains most things pretty well.

I myself have pondered a “cost of rationality” model. It is entirely irrational for me to do so. Personality also shapes one’s rationality.

36 Andrew' November 27, 2012 at 11:07 am

For example, all someone has to for rationality to be preserved is recognize their energy capacities. I choose not to bet against Warren Buffett (in business).

So, we need them to run another study where people can choose whether to play the game or not. Can they stop short recognizing their losses? Sometimes not acting is acting in your interests.

Bill will tell you ( 😉 ) that casinos are experts at pushing in the bounds of rationality.
However, I know only one person that I know of, and I’m not even sure of this, who lost an “irrational amount” of money gambling. Casinos also have to work so hard to do this that it seems to bear out that such people are exceptions that prove th rule. We often define those people as disordered, as gambling addicts and such. As in, when in real life people act repeatedly in demonstrably irrational ways we see them as somehow abherrent.

37 albatross November 27, 2012 at 11:52 am

I don’t know how much the casinos can control this, but it’s almost certainly better for them to have people consistently lose amounts they can afford while having a good time, year after year, than to have them lose enough to seriously screw up their lives once in a while. (The logic here is similar to that of a parasite that would rather not kill its host, or a government that prefers to collect a reasonable amount of taxes every year, rather than taking everything once in a while and leaving the people destitute.)

38 mulp November 27, 2012 at 1:31 pm

Let’s see, your car is broken down, you will be walk to work if it doesn’t rain, but if it rains the cars will splash you as you walk on the side of the road so you will not be able to work as a waiter, you have $1.57 cents left after buying milk for your kid’s breakfast, and the pick-4 lotto ticket is just $1. What difference does $1 make in your life – maybe it will pay $10 or more so you can take a cab if raining. Over a period of a month, maybe you spend $10 on lotto tickets and get nothing – what problems would $10 solve, other than one cab ride, or buying 10 bananas for your kid at the kwikmart.

If you have $10,000 in medical bills from ambulance rides to the ER, what does it matter if you spend $10 a week on megabucks?

When the upper-middle class argue that paying $50-100 for a LED lamp which will save $500 in electric costs plus $250 in $1 light bulbs over the 25 year life of the LED lamp, and you don’t like the $5 CFL color which would save $300 plus $150 over 25 years, who is being irrational by only thinking short term? Of course, when buying a new house, the $750 designer light using LEDs because they are “cool” is a necessity to show your wealth; that goes with the patio A/C to keep you cool outdoors in the summer…

39 Peter Schaeffer November 28, 2012 at 2:08 am


For years I walked to work or took the bus. I was never splashed enough to prevent me from working as a waiter (or any other job). I had serious health problems and no insurance. Treatment was provided by ER’s. I never saw a bill.

My income was meager, but I saved roughly 50% (used to pay off student loans). Eventually my jobs prospects improved and my income rose. I didn’t marry or try to start a family when my income didn’t allow it.

Deferred gratification has its rewards.

40 Bill November 27, 2012 at 11:18 am

Rahul, read about some of the experiments in Thinking Fast and Slow by Kahnemann.

Re attentitiveness under pressure: this week’s Black Friday created an emotional state in the retail store, with people pushing and shoving, etc., and some bought things influenced by the excitement.

Only to return the products next week, upon reflection.

41 Andrew' November 27, 2012 at 11:31 am

That’s why I haven’t gone in almost a decade. After it got crowded I’m not sure how it makes supply and demand sense. As Buffett says Charlie Munger says, “the best way to win at an open-call auction is “don’t go.”” You can learn these heuristics, or learn why they work. It’s not that hard. It is exactly because I don’t think I’m much smarter or more rational that we can expect this of people.

Also, we can insulate ourselves from the irrationality by not giving them money unless that money improves their rationality. However, I don’t believe liberal institutions can pick and choose for people targeting money the way they do such as paying for college for example. My most successful poor friends essentially dropped out of college. It didn’t do much for them other than burden them with loans. Those that used their college degrees simply ended up exactly where you’d predict from their entering human capital level. One of them is a guy who burned me in a Garbage Pail Kids trade, so I learned to never do business with him and would just laugh when he said he wanted to be a doctor.

42 mw November 27, 2012 at 8:53 am

Wow this is a very accurate and intellectually honest discussion of results that go very much against libertarian dogma! Color me impressed.

43 Andrew' November 27, 2012 at 9:12 am

No it doesn’t. Built into the game is that the poor play the game. That is also why they are poor in real life. Poor people should move to middle the same way rich people get rich in “The Millionaire Next Door.” Don’t go into debt trying to look rich. Libertarians just think they are capable of doing that and also tend to think giving them money will just fool them into thinking they can keep up in the game.

44 Brian Donohue November 27, 2012 at 10:12 am


45 Chaos Theory November 27, 2012 at 12:50 pm

I feel like you have a very stylized view of what it is to be poor…

It’s a much much more complex phenomenon that can’t be so easily solved by middle class aphorisms like “saving more” and “investing in high risk/reward ventures”.

Also, that book is stupid.

46 Brian Donohue November 27, 2012 at 3:07 pm

I have a hunch that if ‘stylized views” of the poor are outlawed, this entire post has to come down.

The awkward thing is when a poor person acutally practices bourgeious virtues and improves her station (you know, anti-social things like saving money rather than going eyeball high in debt like a real American. It happens, every year, to lots of real, actual poor people, but it is such a boring story.)

It’s like a total affront to the finely-crafted worldview of helpless sheep and benevolent Big Brother.

47 MD November 27, 2012 at 5:26 pm

I suppose another awkward thing is when a person is on the dole for a bit, avoids becoming homeless, keeps the kids fed, then improves her station and gets off the dole. It’s like a total affront to the finely-crafted worldview of dependency and incompetent Big Brother.

48 sort_of_ knowledgeable November 27, 2012 at 4:38 pm

Some of the poor may have been playing to get lifestyles of rich and famous e,g. playing lottery. Many would consider themselves winners if had a place to live where they didn’t have annoyances such as sounds of sirens every couple of days, and bedbug infestation every couple of months and other inconveniences that occur in lower rent areas. The game is also different in that they often don’t get interest on bank accounts but get charged fees for having one since they don’t have direct deposit or $x,xxx minimum balance.

49 mw November 27, 2012 at 9:14 am

That’s a lovely sentiment, meanwhile those of us living back on planet earth and making policy for the species known as humanity would like to do so based on the actual constraints of human behavior, rather than how we would like human behavior to be.

50 Andrew' November 27, 2012 at 9:49 am

No, on planet earth there are still no signs of intelligent life because are keep doing things exactly wrong. You glorify the aspects of the poor that probably should be judged, or at least referred to frankly as “those things you are doing that keep you poor.” You trickle out resources to keep people just barely surviving. You don’t teach people how to get out of the rat race. You haven’t actually fixed poverty or demonstrated any examples of fixing examples of poverty systematically. Your disability system, just one example, is a disaster and exemplary of the flawed logic of your policies that are the opposite of dealing with how real humans behave. Maybe consider trying some different strategies.

51 mw November 27, 2012 at 10:48 am

See Duflo, Esther.

52 Andrew' November 27, 2012 at 12:14 pm


53 Andrew' November 27, 2012 at 10:48 am

But seriously, if peope insist on acting irrationally, or just ignorant, what is the optimal policy? Give them money to shield and obscure their losses? Punish them above and beyond their losses to amplify them? Do those options sound more realistic and humane than just asking them to take responsibility for their own investments and losses?

Poor people, please slow down your game moves to the point of your rationality (especially when there is some other guy on the other side of the trade like Payday Loan places). That might mean having kids as late (and as few) as rich white people do. It might not. It’s interesting to me how awesome orgasms are. It’s like nature knew we’d figure this procreation scam out eventually.

54 guest November 27, 2012 at 12:53 pm


55 jizay November 27, 2012 at 9:42 am

mw – this is the second time this article was mentioned on MR, and both times you were all over the comments stumping for it and shouting down detractors. Are you the author or the author’s friend?

56 Andrew' November 27, 2012 at 9:53 am

Who is detracting anyway? It’s weird to go to the place where someone posts an article (twice) and people are discussing open-mindedly and then be told how out of character it is.

57 mw November 27, 2012 at 10:49 am


58 RPLong November 27, 2012 at 8:55 am

I’m not sure that experiment is an adequate test for this.

The thing is, does anyone have any reason to believe that the poor are the only ones who behave this way? The ability to think about long-range consequences to present-day actions (and how long-ago actions predicated present-day situations) is nothing more than a highly refined sense of abstract reasoning. It is the last, most complex function our brains learn to perform. Anyone – rich or poor – who learns how to think in terms of long-range planning and cause-and-effect will not remain poor for long.

So I think this is not a theory about “the urgent overcoming the important,” so much as a theory of human cognitive ability and the implications that has on income levels. Logical intelligence isn’t a guarantee that you’ll be rich, but it’s a good predictor of who won’t be poor.

59 Tom West November 27, 2012 at 9:27 am

Logical intelligence isn’t a guarantee that you’ll be rich, but it’s a good predictor of who won’t be poor.

Except this experiment pretty much directly contradicts your statement. Roughly speaking, people across the intellectual spectrum who “simulated being poor” made the sort of mistakes that the actual poor do.

Now obviously there’s about a million caveats you can make about whether the experiment models real decision making, etc., and there’s no doubt that lack of intelligence is going to be extremely detrimental to bettering your financial position, but this certainly adds some ammunition against the “the poor deserve to be poor because they make bad decisions” moral argument.

60 RPLong November 27, 2012 at 9:55 am

Tom, the study only contradicts what I’m saying if you believe that playing Family Feud with varying levels of “game resources” is on any level comparable with making a decision to play the lottery or smoke cigarettes or take out a payday loan. It’s basically ludicrous, although I’m being impolite to say so.

It’s also badly out-of-context. Consider Zimbardo’s research on situation-based behavior. Are limited resources impeding their long-range cognitive ability, or are they merely falling into role-playing patterns consistent with the last 50 years of psychological research into the issue? I mean, if we are talking about empirical evidence, my money’s not on this study.

61 Andrew' November 27, 2012 at 10:14 am

My money is not on any single study…unless it’s MY study!

62 Tom West November 27, 2012 at 10:14 am

Fair enough. Certainly I would be interested in seeing variations of this study that modeled reality for the poor a little more closely to see how results stand up.

None-the-less, I fully expect that this psych study will be quoted, simplified, and over-generalized many many times over. These kinds of studies are catnip for many (especially when the results echo one’s own instincts). (“Ah, *that’s* how humanity works!”)

63 Andrew' November 27, 2012 at 12:16 pm

That’s a known issue!

And you nail the solution, more studies!

64 Bernard Guerrero November 27, 2012 at 3:32 pm

Actually, payday loans can be quite rational for some users. Paying, say, $20 per $100 loaned for 14 or 28 days looks ugly, but it usually beats reconnection fees, late fees, deposit requirements, losing your job because you couldn’t get the transmission fixed, etc, never mind what overdraft fees on X bounced checks will look like.

However, the question then moves towards “why did you get into a situation where not having $400 on hand was going to cost you $500?” I would suggest that the irrational behavior takes place *well* before the thought of a loan ever shows up.

65 Ken S November 27, 2012 at 10:46 am

If predatory loans were stopped (which as far as implications go this would be the most a study like this could support) a general statement like ‘the poor deserve to be poor because they make bad decisions’ would just become more true than it was before.

66 EngineerSavant November 27, 2012 at 11:02 am

It’s not that the poor can’t think long-term, or that the rich always do, it’s that the propensity is, when you don’t have the money, you spend mental energy worrying about how you are going to afford the expenses you have to pay, mental energy that can be used for other tasks when you don’t have those worries.

67 RPLong November 27, 2012 at 11:08 am

Yes, ES, I get the hypothesis, I just disagree with it.

If this is true, then it must be true of more than just the budget constraint. Money isn’t the one and only important factor anyone has to take into consideration. There are utility constraints that apply to economic decision-making at all income levels, and there is no reason to believe that Constraint X at Income Level A “requires more mental energy” than Constraint Y at Income Level B. See what I’m saying now?

68 Ben November 27, 2012 at 12:35 pm

Seems like there’s really only two main constraints that people face: time and money. And the authors adjust both of these constraints in the paper–in some cases the “poor” have less time and in some fewer guesses, etc. They couch their results in terms of poverty, but obviously their results would hold for anyone who is constrained. I think their point is just that the poor are the most constrained, and therefore most affected by this idea. I think that a super-busy (and super-rich) CEO would also have the same tendency to focus on the most urgent tasks, because he’s facing a tight time constraint.

69 maguro November 27, 2012 at 6:50 pm

Time, money and ability.

70 Floccina November 28, 2012 at 3:13 pm

you spend mental energy worrying about how you are going to afford the expenses

Of the poor people I know, if they worried how they were going to afford expenses, they would not find themselves in the predicaments that they get in. The problem is they do not worry and when they have money they spend it and despite being laid off many times they act as if their current job will last forever.

71 GiT November 27, 2012 at 1:31 pm

“Anyone – rich or poor – who learns how to think in terms of long-range planning and cause-and-effect will not remain poor for long.”

File under “things that are manifestly untrue.”

72 RPLong November 27, 2012 at 2:15 pm

File under “glorified ways of saying ‘nuh-uhhh!'” :p

73 GiT November 27, 2012 at 7:01 pm

Being able to think in some fashion does not entail being able to act in accordance with what one can think.

74 RPLong November 28, 2012 at 9:42 am

That’s a bit of a red herring, though, isn’t it? Or did I miss something, and what we are supposed to be arguing is whether wealth is 100% meritocratic vs. 100% chance?

75 mulp November 27, 2012 at 2:39 pm

Your old car needs over $500 in repairs. You only have $10. A taxi to work and back will cost $8 a day. It is 3 days until you get paid $300 a week. You need to pay the rent, $80 a week. You need to buy a phone card to keep your prepaid phone working so you can call the cab. You have nothing left to eat except ramen. Without a car, you can only get to the kwikmart, unless you pay for a taxi. The payday lender is next to the kwikmart, and next to the pizza and sub shop. You have no kids, girl friend, only a TV off-the-air. To use a computer you drive to the library, which has closed on weekends due to budget cuts, but with a car you could get half an hour before work. The State public community college charges $1000 for a 3 credit class at night (more during the day) due to State funding cuts, but it can only be reached by car/taxi.

Ok, slow down and plan your way to the middle class job in three years.

Obviously, finding a way to fix your car, or store it, must be a very low priority and you should let it be towed away for being illegally parked on street cleaning day with a $100 towing and impound fee.

76 Bernard Guerrero November 27, 2012 at 3:45 pm

I’d be more sympathetic if my wife and I hadn’t been dirt poor and living in a fairly expensive bit of the north east (Hoboken) right after we graduated. Apart from already having an undergrad (earned under similar circumstances), what you describe was not that far off from our existence for a couple of years. *But*. But you can, in fact, plan your way out of a fair amount of it. I wouldn’t want to recreate that level of pressure at an age where my energy would be way, down, say, 50, but at 22 it is not at all impossible. However, it does require certain assets, not least a stable, reliable human being as a partner, a willingness to eat said ramen for years on end and a willingness to forgo kids for years further.

Also, informal family support networks are, while not strictly required, extremely helpful. (That payday guy may well be cheaper than the alternatives, but borrowing $100 from Dad until payday is cheaper still.)

77 Floccina November 28, 2012 at 3:28 pm

That is quite a hole you dug yourself into. Very short term yeah you are stuck but I will try.

I go and get a payday loan and buy a bike. I bike to work late on day one and plead the boss for mercy. I try to find a someone to share the rent with (I once lived on a friends living room floor for about 4 months. I had no car and job in a mall so that I could bike, I begged rides from coworkers and took the bus when available or walked the 6 mile a few times). First payday I buy a phone card. I live on carrots and pasta for food. BTW one could easily bike 40 miles a day, I have. I might sell the car.

78 Rahul November 27, 2012 at 9:02 am

Isn’t it a long term mindset though? A lifelong poor man suddenly given a lot of money will not behave like a rich man.

Wouldn’t this experiment be more realistic by choosing rich and poor volunteers to start with than merely simulating richness or poorness?

79 Andrew' November 27, 2012 at 9:24 am

Excellent point. In policy, we already kind of do it, we’d run the experiment by extending credit or giving money. See if they still need money a few years later or if they made the most of the resources. We do it through education and welfare for kids. Athletes, entertainers (less so) and lottery winners are further evidence for your point. Also, many rich people failed prior to becoming rich so they had to modify their brains towards a success orientation.

80 Rich Berger November 27, 2012 at 9:04 am

We used to listen to Dr. Laura and were astonished to hear the predicaments that people got into simply by not thinking about the effects of their actions. Just thinking one step ahead would have reduced the misery that many of these people brought upon themselves.

Dave Ramsey deals with many people who have found themselves deep in debt, and helps them get motivated to get out. One of his “baby steps” is to accumulate a $1,000 emergency fund. His observation is that when you have such a fund, some emergencies (like a car breakdown that could prevent you from going to work) are no longer crises.

There is no magic to this approach – just apply a little thinking ahead. This does not require a genius level intelligence. I am appalled by the casual approach to child bearing that is becoming more common. No marriage, no thought, but a baby. There has been a collapse in standards where it is considered mean to hold people accountable. This is not going to turn out well – we need some more pointed judgmentalism.

81 Andrew' November 27, 2012 at 9:17 am

What I don’t like about conservatives is their judgment is based on adherence to the baseline of traditions. What I don’t like about liberals is that they judge bad outcomes as being everyone’s fault but the victim of the outcomes. I think they don’t see how they are flip sides of the same coin. Where conservatives want the unwise to adhere to abstinence and church, the liberals want them to adhere to the new tradition of safer sex and ‘family planning’.

82 Ellie Kesselman November 27, 2012 at 10:43 am

You don’t like the conservative approach nor the liberal one. Conservatives suggest abstinence and church to prevent unwanted pregnancy. Liberals suggest safer sex and family planning (by the way, conservatives suggest family planning too. Well, Roman Catholic-type conservatives do, in the form of the rhythm method. That is also endorsed by not-conservative women who are fertile but over 38 years old, married or not, and do not wish to bear children but do not want to be abstinent. I mention this because you seem to be making such absolute comparisons, presumably for purpose of contrast).

Anyway, you don’t care for either approach. What other approach is there? I realize that they are flip sides of the same coin, but you don’t seem to like contraception, as you bracket ‘family planning’? I am curious, not being gratuitously argumentative or confrontational.

83 Brandon Berg November 27, 2012 at 12:07 pm

For all its faults, slavish adherence to tradition has the advantage of guiding people with limited cognitive skills away from major pitfalls, something that would otherwise require more foresight than they typically display. It’s all well and good for those on the right side of the bell curve to toss out tradition and make their own judgment calls, because they can do it. But look what it’s wrought for those on the left side.

84 Thinker November 27, 2012 at 1:05 pm

You didn’t think this through.

There are as many examples of socially harmful traditions as there are of helpful. If you disagree I suggest you try submitting to sharia law or maybe becoming a Christian Scientist and report back to us (or are only *your* traditions the good kind?).

Also, those on the “left side” of the curve are better off today (in this society, at least) than at any point in history.

85 maguro November 27, 2012 at 6:52 pm

Sharia law is already here, my friend. Just ask Mr. Nakoula!

86 Candide III December 5, 2012 at 7:05 am

Also, those on the “left side” of the curve are better off today (in this society, at least) than at any point in history.

Specious. They are not better off because tradition went out the window.

87 Candide III December 5, 2012 at 7:02 am

Just thinking one step ahead would have reduced the misery that many of these people brought upon themselves.

Actually, just thinking zero steps ahead (i.e. “wait, what the hell am I doing this for? why am I doing this?”) makes a lot of difference. The catch is, you have to stop and really think about it and not just say the first reason that pops into your head.

88 rahul November 27, 2012 at 9:05 am

Isn’t it a proven result then that the extent of glucose in one’s body directly determines the level of ego depletion (more glucose, less depletion)? Poor people struggling to make these incessant decisions may intuitively get this and pump up on Macs and fries and colas to stay afloat. So, is it possible that non-obese poor people are really making the worst decisions? I.e. if we are being paternalistic, we should encourage consumption of sugary stuff? (here’s looking at you, Mayor Bloomberg)

89 Turkey Vulture November 27, 2012 at 9:20 am

I believe that my consumption of Mountain Dew has a strong positive correlation with my feelings of poverty and concerns about money. Long-term it just made me fatter.

90 Jeff November 27, 2012 at 10:28 am

I’m all for 16+oz soda, but the glucose mechanism isn’t without its detractors (like everything else)…one example:

91 Brian Donohue November 27, 2012 at 9:53 am

But didn’t almost everyone used to be poor? How’d that ever change?

92 Turkey Vulture November 27, 2012 at 9:56 am


93 Dan Weber November 27, 2012 at 11:43 am

A community of farmers needed to save food to live through the winter, so everyone around you is also against short-term consumption.

And borrowing Jebediah’s plow if yours broke would involve 1) taking good care of it, because the community knows both you and Jebediah, and 2) make sure you prioritize getting yours fixed, because the whole community knows Jebediah lent you his plow.

Jebediah probably wouldn’t charge interest, because he would be paid back by the community knowing that he lent you his plow.

94 Bill November 27, 2012 at 10:10 am

People look at income, but what they ignore is WEALTH.

Wealth is INSURANCE if you have to switch jobs, WEALTH means that you can continue to pay the mortgage while looking for a job, etc.

For the 47% a poor mans wealth is unemployment insurance. For a time.

95 Andrew' November 27, 2012 at 10:15 am

Or, you could buy a smaller mortgage (the bank owns the house).

96 Frequent Reader November 27, 2012 at 1:06 pm

and miss out on the investment opportunities? Weren’t you the one preaching “The Millionaire Next Door” earlier?

97 Brian Donohue November 27, 2012 at 6:07 pm

Wait what? You must have read the edition of The Millionaire Next Door featuring massive financial leverage and OPM as the keys to wealth creation?

98 gig November 27, 2012 at 10:11 am

If you are an M&A advisor during the gold rush that is ithe last 6 weeks of these cap gain rates, I promise you that a broken car, marriage problems, plumbing, etc is as stressful as they are to a Home Depot shift manager, except the hassle is dealing with it, not paying for it. Earning a high wage introduces all sorts of ego depletion not covered by that study.

99 MD November 27, 2012 at 2:15 pm

Having been both poor and not-poor, I can tell you with certainty that being poor and having money problems is much more stressful than being non-poor and having money problems. “What if we have to move out of this nice apartment in a nice part of town to a bad apartment in a bad part of town” is not nearly as hard as “what if I have to move out of this bad apartment in a bad part of town and move … god knows where.”

100 anon November 27, 2012 at 2:35 pm

Having been both poor and not-poor, I can tell you with certainty that being poor and having money problems is much more stressful than being non-poor and having money problems.

Many people in the USA have never been “poor and having money problems”. One of my children currently at university is astounded at the large amount of magical thinking in his classmates about work, money, and lifestyle. Many of them have never worked, and many of those have never had to work to help pay for school or living expenses, such as gas for the car.

Over the holiday he told me that he is starting to see and hear his senior classmates getting very worried about what they are going to do after college to make a living.

101 Gordon Mohr November 27, 2012 at 10:20 am

I’m reminded of the recent refinements of the ‘marshmallow’ experiments. Specifically, that a child’s perception of the reliability of adults/experimenters was as large a factor as any supposed innate ability to delay gratification.

So now we know at least two things which, when present, improve the ability to reason for gains over predicted futures: (1) a larger endowment (this study); (2) greater confidence in predictable counterparties/payoffs (the latest marshmallow tests).

Could a designed intervention create similar reasoning improvements when needed for important decisions? That is, other than handing over a bunch of money, can the same frame of mind that helps those with large-endowments be induced, with some mental exercise or other priming? Other than changing an individuals’ home environment, could the helpful level of confidence in delayed payoffs be induced?

102 Rich Berger November 27, 2012 at 10:37 am

So the poor are poor because they are poor, eh? How does a poor person become non-poor? (I understand that millions of them have done so) If we could figure out how they did that, we would have the answer, wouldn’t we?

103 greg byshenk November 27, 2012 at 5:55 pm

In many cases, a poor person becomes non-poor by being lucky. That is, by not getting sick at the wrong time, not having the car break down at the wrong time, etc. People talk about planning, but when one is poor and just getting by, anything that goes wrong can wreck one’s plans, and can even tip one over into a downward spiral of expensive borrowing.

104 Ellie Kesselman November 27, 2012 at 10:53 am

For the author, Mr. Alex T.: I read your post, I read the paper abstract. Yet I remain confused by this, in your last paragraph:
“poverty (over)-stimulates attention to urgent problems [resulting] in less attention for important problems… reduce urgencies and people may… devote attention to important problems like deworming or hygiene or paying the rent…”


105 Bob Knaus November 27, 2012 at 12:01 pm

I was de-wormed as a child. My mother was horribly embarrassed, not having grown up in the rural South. The doctor told her “You show me a kid who doesn’t have worms, and I’ll show you a kid who doesn’t have friends.”

Not quite so true today, but worms are still a problem among the poor in the US… and a BIG problem world-wide.

106 Ellie Kesselman November 28, 2012 at 2:26 pm

Bob Knaus: I’m sorry to hear that. I thought about it more, recalled that worms used to be more prevalent for children, throughout the U.S.A.. Tape worms are the worst, though fortunately, not so common as less invasive varieties.

My own mother had scarlet fever, then ricketts (rickets?) and she didn’t grow up in the rural South. Instead, in West Philadelphia. She was the first to graduate high school, full scholarship to Temple University. She chose to be a Spanish teacher in public schools. She’s so much brighter than my uncle, he’s two years younger (he’s a rheumatologist). Anyway, I told my mother about you and the worms. She sympathized with your mother, and said that I should reply courteously to you, as I had commented without thinking first. She was right.

107 Charlie November 27, 2012 at 11:43 am

As the kids say nowadays, “First World Problems”

108 Travis Allison November 27, 2012 at 11:44 am

I wonder how moving procreation from a possibly thoughtless act to a well considered act when there are sufficient resources would move people to a better equilibrium. Imagine that the govt paid all women from 15 to 45 an income of $X/yr so long as they have an income of less than $20,000/yr (tapering off somehow to avoid marginal disincentives) and are childless.

The above idea will possibly smack people of eugenics, but of course that is not the goal at all. It is simply a nudge that is analogous to making a contribution to an IRA a default. It is very tough to raise children on less than $20,000/yr. Of course, people can do it, but I wouldn’t recommend it.

109 Brandon Berg November 27, 2012 at 11:57 am

But there’s nothing wrong with eugenics as such. Improving the gene pool is self-evidently a good thing. The problem with classical eugenics was the methods, not the goal.

110 dBonar November 27, 2012 at 12:18 pm

Or perhaps the idea implies that there are people in charge making a judgement of who has “good” genes and who doesn’t. And that no matter their best intentions when setting up the program, that seems likely to be a bad thing

111 Brandon Berg November 27, 2012 at 1:25 pm

Sure, the government can, and probably will, screw up anything. The thing is, the government already has free reign to implement all kinds of stupid policies, and does so regularly. We already have a de facto dysgenics program.

The point is that the fact that a specific policy (such as paying the poor not to have children) would have a eugenic effect is not a good reason to oppose it. On the contrary, it’s a point in the policy’s favor. This is not to say that there may not be other, overriding reasons to oppose it, of course. The obvious one in this case being the cost to taxpayers.

112 dBonar November 27, 2012 at 12:02 pm

Partially off topic. I have wondered at times if there isn’t a “rational” explanation for lower saving when you are poor.

The marginal value of an extra dollar of income is higher when income is lower. So, when choosing whether to save that dollar, the necessary rate of return to make saving “worth while” is higher when you have less income. Basically that the indifference rate of return is not defined just individual time-preferences, but also by the individual’s current and expected income. It doesn’t seem a very deep idea, but never seems to get mentioned.

113 Alan November 27, 2012 at 12:21 pm

This research must be flawed. Everyone knows that poor people are inherently and fundamentally inferior.

114 Andrew" November 27, 2012 at 1:12 pm


115 The Anti-Gnostic November 27, 2012 at 4:25 pm

What they are is inherently and fundamentally different from the people who post on this website. And by poor, I mean people from what my decidedly non-prosperous parents used to call “the wrong side of the tracks.” Not tradesmen, not young couples just starting families, not Syrian immigrants working for dirt in a store while they make their way, not business owners who go bankrupt and have to lick their wounds in a cheap apartment. Practically everybody (unless this is a more rarified crowd) has transitioned through a “poor” phase. I mean poor as in trash-poor.

These people are unable to grasp abstract concepts and are high time-preference and make little effort to control their impulses. Even your middle-school aged children, assuming they go to an economically-mixed school, will be able to spot them and avoid them. So will the parents, who will gladly take on $100K extra in mortgage or pay private school tuition so their kids don’t have to go to school with loud, boorish, sometimes violent poor people.

116 Paul McKaskle November 27, 2012 at 12:48 pm

This reminds me of the old Indian tactic of chasing an or escaped prisoner or intruder). Three captors set out after the escapee. One runs very fast–the equivalent of a runner trying to win a 100 yard (or even 220 yard) race. The second runs slower, perhaps as if running a one or two mile race. The third runs even slower, a speed appropriate for a marathon race. The escapee has a problem. Even assuming he (or she) is a better marathoner than any of the captors (thus would complete the escape successfully if that were the measure) he has an urgent need to outrace both the sprinting captor and the mid-distance captor, using up energy and endurance which will impair his or her ability to win the marathon race. So, should the escapee ignore the urgent need?

117 Interested Party November 27, 2012 at 1:11 pm

Brilliant. I’d never heard of that.

118 Bob November 27, 2012 at 2:17 pm

Actually reading the article, they do say that people expend more mental energy when “poor”. When more focused on current “rounds” they borrow more heavily from future rounds. I take it this means all poor people aren’t focusing on the immediate. In a later game, the Family Feud, poor people performed best when they couldn’t borrow from future. It’s not explained very well in the article and I just skimmed the experiment supplement.

My read of it is that people who face constraints expend more mental energy or focus. People who are focusing on the right now change their discount factor of the future. In fact, a discount factor might be irrelevant and they aren’t really thinking or planning at all for the future. My guess is the latter as people aren’t thinking how they are borrowing from the future but instead really just trying to increase resources for the now. Also, these experiments weren’t conducted with poor people. One was with Princeton University students and the rest were recruited from Amazon’s MTurk.

This is a result overreach by authors which is all to common in the experimental field. The interpretations are a bit stretched.

119 Ricardo November 27, 2012 at 11:28 pm

“Also, these experiments weren’t conducted with poor people. One was with Princeton University students and the rest were recruited from Amazon’s MTurk.”

That’s the point, though. They wanted to see what would happen if you take people who are ordinarily rational, forward-looking, have high IQs, etc. and artificially make them “poor.” I suppose the next step might be to randomly take Princeton graduates and drop them in the middle of rural Ghana with $5 in their pockets but IRB committees might frown on that.

More seriously, there is a line of development research that focuses on the role of behavior and cognitive function in poverty. That research necessarily involves a series of hypotheses about psychology that can be tested in experimental settings. I don’t think the authors would say this is anything more than one data point that supports a certain psychological hypothesis that is relevant to questions of poverty.

120 Adrian November 27, 2012 at 3:22 pm

This is interesting and quite important. I had a similar experience to this when trying to study for some very important exams, and at around the same time having to suddenly find a new apartment because my roommate left. The fact that I had to devote so much time and mental energy to the task meant that the spare energy could not be used in pursuit of study. These additional worries can be quite consequentional.

121 maguro November 27, 2012 at 7:06 pm

Time constraint can certainly be consequential in specific instances, I don’t think anyone would question that, but how consequential is it in the aggregate and how much of a factor is it in the bad decisions that poor people make? The effect could be quite real without being of much practical significance.

122 Adrian November 28, 2012 at 2:55 am

I my specific case the time constraint was important, because without sufficient time to peruse a wide array of properties, the end choice was sub-optimal. I can imagine something similar with poverty. By compressing time into smaller chunks then suboptimal decisions are made, and these can have immediate and quite serious cash flow consequences, which build and flex.

123 secret asian man November 27, 2012 at 5:44 pm

If this is true, why is it that poor Asian immigrants don’t seem to be affected?

124 supersecret asian man November 28, 2012 at 2:37 am


125 Ellie Kesselman November 28, 2012 at 2:39 pm

Secret Agent Man: Obviously, it is because poor Asian immigrants are more highly evolved! That only applies to recent immigrants though. Progeny exhibit atavistic tendencies similar to other poor immigrant groups of the prior century. However, it has been observed (but not proven 😉 that the presence of vigilant and loving parents and grandparents are negatively correlated with progeny atavism to the general population :)

126 ChrisA November 27, 2012 at 9:39 pm

This just makes me mad, I really hate this fatalistic idea that once you are poor you can do nothing about it. The study did not demonstrate the thing that it claims to do so, i.e. that poor people make bad decisions because they are stressed due to lack of time to think through their decisions. The study just showed that stressed people make bad decisions – that’s a pretty obvious conclusion and does not support a conclusion on why poor people are poor. The study authors need to show that in fact poor people are more short on time to make their decisions than richer people – a whole different story. My personal experience is that this is just not true – poor people in a western society have plenty of free time, as others have pointed out above just look at the amount of TV people watch.

My own anecdote – not data – I grew up in extreme rural poverty – and living in the real third world I know what poverty is. I realized from an early age I had better work at school so I could get out of this situation. The others in my school (including my siblings) spent most of the time goofing off. The one who was stressed and short on time during this period was me. But I was the first one in my school to go to University. I go back to my village now and most of my school mates are still there, fairly poor compared to me. I mention this not to boast about my cleverness, but to point out that getting to the middle class is actually fairly easy with just a little foresight. It really is just a matter of hard work and willingness to sacrifice some short term pleasures for long term gain. I really fear that if the wrong message is given to people in a similar situation to the one I was in as a child (forget hard work it’s all about luck), we are going to destroy peoples lives. Charles Murray had it exactly right – we should be preaching the value of hard work and planning for the future as much as we possibly can, not denigrating them.

127 The Anti-Gnostic November 27, 2012 at 10:57 pm

I had a grandfather who left school when he was 16 because his father died and he had to support a mom and sisters. He worked as a butcher’s assistant, then a butcher, took night classes, got a job with Procter & Gamble, and died in a secure retirement. My other grandparents came from nothing as well. They clawed their way into the middle-class families and “welfare” was unthinkable. Another old family member shot squirrels for food as a teenager because his parents couldn’t be bothered to earn a living. I have a friend who’s now a senior executive for a large investment firm. His parents were nobodies who worked in factories. He loaded trucks while he got his MBA at Wharton. I am close with several immigrant families whose patriarchs came to the US with a suitcase and a thousand dollars scraped up over years. A couple became millionaires and the ones who didn’t, their children did and bought them houses for retirement gifts. Amazingly, they did all this without AA or suing anybody for disparate impact.

Didn’t Oprah start out poor? Someone upthread mentioned Eisenhower–what was his start? We have become a strange, helpless people.

128 The Anti-Gnostic November 27, 2012 at 11:00 pm

*into the middle class and…

129 Nathaniel November 27, 2012 at 10:49 pm

I’ve seen “this” study on Marginal Revolution before. All the way back in ’08!
Same way you might get worse grades on your courses if you have 4 really hard finals in one week instead of 3. Only so much time and so much brain to go around.

130 The Anti-Gnostic November 27, 2012 at 11:03 pm

Most wealthy people I know have very little time on their hands.

131 sup November 28, 2012 at 11:14 am

By choice, not necessity.

132 Steve November 29, 2012 at 1:19 am

Ever hear people say “I’m not a good test taker”. You can replace that statement with “I’d be poor if I didn’t start with many advantages compared to others”.

133 Jeffrey Deutsch December 8, 2012 at 3:03 pm

Check out this (NSFW) piece on the realities of poverty – including why many poor people make seemingly myopic decisions. It’s a balanced perspective – sobriety is important, and so is having enough money to, say, fix water leaks as soon as they happen with quality work. And buy reliable cars.

Also judging from his other work, the guy who wrote it seems to really know where it’s at.

Jeff Deutsch

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