People in poverty tend to make worse decisions than those who are not in poverty — they eat less healthy foods, have weaker relationships and tend to be late for appointments.
While it would be easy to conclude that making bad decisions is the root cause of poverty, new research is showing that poverty itself may cause poor decisions.
In a recent study published in the journal Science, researchers found that people who normally function at the same level of cognitive ability make worse decisions when money is tight.
The number of decisions the poor have to make to get by exhausts a limited resource of mental power that all people have, according to Eldar Shafir, co-author of the Science study and "Scarcity: Why Having Too Little Means So Much."
“It is well-known the poor are disadvantaged in many ways,” Shafir told Deseret News. “They might look like they make worse decisions, but it doesn't have to do with lower intelligence. For every person where lower intelligence leads to poverty, poverty causes people to act less smart."
And experts say that understanding the effect poverty can have on decision-making may lead to better ways to reduce its root causes.
Making poor decisions
In the study published in Science, the researchers looked at two different sets of people — sugarcane farmers in rural India and mall-shoppers in New Jersey.
In both cases, they found that the strain of poverty decreased performance on a set of mental reasoning tests.
In the study of Indian farmers, researchers knew the farmers received all of their income after harvest, meaning they experienced financial hardship pre-harvest and a relative boom post-harvest. When given intelligence tests, farmers performed better after the harvest than before.
In New Jersey, poor people and rich people were given different scenarios to fix a car, one where repairs would be inexpensive and one where that would cost much more.
When the repairs were cheap, poor people and rich people performed similarly on the cognitive tests. But when they faced the expensive fix, poor people performed significantly worse on the tests than the rich.
From these case studies, researchers concluded that instead of poor people being less intelligent than rich people, it appears that “poverty itself reduces cognitive capacity” because the mental capacity needed to live in poverty actually uses up limited mental resources.
The findings of this study coincide with other studies that have found that cognitive ability can be impaired when placed under intense strain.
Kathleen Vohs, a professor at the Carlson School of Management at the University of Minnesota who holds a doctorate in psychological and brain sciences, said that research has shown mental capacity for decision-making and self-control are finite resources that can be depleted.
That is, after being forced to use self-control, people are more likely to make intuitive, often regrettable, decisions like spending all their cash or overeating.
Therefore, people become worse at self-control the more they are forced to make decisions that require exercising restraint, explained Vohs. And people in poverty are forced to make decisions that require trade-offs — whether to pay an electric bill or buy groceries, for example — more often because of their lack of financial resources.
“Linking this idea that poverty is difficult and taxing with this general model of self-control is hugely powerful,” Vohs said. “Now we better understand why people in poverty make bad decisions — why they are not able to eat healthy, get to jobs on time, have good interpersonal relationships — these are all things that use our self-control. We only have a finite amount of self-control and we know from the research that needs to be restored, but poor people are whittling it down and not able to replenish their energies.”
Implications for poverty work
These findings may have profound implications for understanding how to alleviate poverty, according to the Science report.
People in poverty already have many impositions on their mental bandwidth, from figuring out how they are going to get to work without a car to how they are going to pay rent that month, said Shafir.
And many poverty programs such as job retraining or education programs are only adding to this load by requiring reams of paperwork or specific times when a person must show up to receive the benefits, Shafir told Deseret News.
Such restrictions, which might seem minimal in isolation, add to the already maxed-out strain on a poor person’s mental ability and thus make it much harder for someone who wants to succeed.
An application is necessary to get help from A Servant's Heart in Ottawa, but volunteers are available to help people with it, said John Henning, vice president of the ministry.
"We sit down with individuals one-on-one and help them make decisions regarding their income and needs," Henning said. "We don't want to be a Band-Aid solution, but help people stand on firmer ground."
A Servant's Heart also tries to connect people in need with any number of other organizations that can help, including the PADS homeless shelter and Tri-County Opportunities Council. This can alleviate the amount of work someone in need may have to do to get in contact with helpful groups.
Tri-County, which serves a nine-county radius in Illinois, tries to step in and provide a plan for people in poverty to follow, said Dorothy McBridge, community services director.
"Whatever is due today is what's on their minds," McBride said. "They are unable to think about the future, because they have to live day-by-day. What we can do is simplify things for them, by sitting down with them, and giving them an attack plan."