blo gs.edweek.o rghttp://blogs.edweek.org/edweek/civic_mission/2013/11/understanding_the_cognitive_demands_of_poverty_on_our_students.html?print=1

By Sam Chaltain on November 15, 2013 9:42 AM

Understanding the Cognitive Demands of Poverty on ourStudents

Guest post by Zac Chase

New Jersey shoppers and Indian sugarcane f armers might have something to teach us about poverty andcognitive load. An article in the August issue of the magazine Science examined the possibilit ies of a causalef f ect between considerations of poverty and study participants' abilit ies to perf orm cognitively-demandingtasks.

The authors set out to examine the common belief that poverty reduces cognitive capacity and "suggest thatthis is because poverty-related concerns consume mental resources, leaving less f or other tasks."

Being poor, in other words, results in worrying about being poor, and that leads to f olks not having as muchroom to worry or think about other things.

The researchers approached the study f rom two dif f erent perspectives. First, they asked shoppers at a NewJersey mall to consider two dif f erent f inancial situations. The f irst "hard" situation included asking participantswhat they would do f aced with a $1,500 expense f or a car repair. The second "easy" situation centered arounda $150 car repair.

When triggered to consider a "hard" situation and then complete two dif f erent cognitive tests, poorparticipants perf ormed signif icantly worse than their richer counterparts. In the f ace of the easy, $150scenario, there was no signif icant dif f erence between the results of rich and poor participants.

For teachers, this could have interesting implications. Students who are living with persistent poverty orexperiencing temporary poverty could exhibit similar results when asked to complete academic work.

In some situations, it 's been suggested that students be of f ered f inancial incentives in return f or improvedperf ormance. The researchers' results, however, suggest that incentivizing results will not improveperf ormance, or that any gains that do occur will eliminate the breach between rich and poor students.

Again, when study participants completed the cognitive tests while considering the "easy" scenario, there wasno signif icant dif f erence based on income. Put another way, neither the poor nor the rich participants wereinherently better or worse at the tasks, but it was consideration of monetary hardships that appeared to saptheir cognitive abilit ies.

Taking things out of the lab, the researchers turned to sugarcane f armers in India, and asked them to perf ormsimilar cognitive tasks prior to and f ollowing their annual harvests. Traditionally, during the pre-harvest period,f armers must take out loans, pawn their belongings, and take other measures to make ends meet. Post-harvest, though, they experience a substantial inf lux of cash that eliminates the need f or these largermeasures.

Not surprisingly, when f armers didn't need to worry about their economic state, their response times anderrors in the researchers' cognitive tests dropped signif icantly while their accuracy in answering rosesignif icantly.

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Not having to worry about money, it seems, means an increased ability to handle a larger cognitive load.

Assuming these variables create a similar ef f ect when applied to students in the classroom who are also livingin poverty, this study raises some important questions f or educators.

How might we change our practices with this knowledge? What actions might we take to acknowledge theimportance of f inancial security f or the f amilies we serve?

Perhaps extending the school day f or poor students who struggle academically might not be as helpf ul ameasure as coordinating a f inancial advisor, local career coach, and continuing education opportunit ies f orparents so that they might better secure the f inancial outlook of our students.

In the meantime, the study's researchers point out, "Filling out long f orms, preparing f or a lengthy interview,deciphering new rules, or responding to complex incentives all consume cognitive resources." Perhaps we couldstart by being more mindf ul of how of ten we ask our students to complete similar tasks and realize there is abetter way.

Follow Zac on Twitter.

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o pinio nat o r.blo gs.nyt imes.co mhttp://opinionator.blogs.nytimes.com/2013/09/25/escaping-the-cycle-o f-scarcity/?_php=true&_type=blogs&hp&_r=1

By TINA ROSENBERG

Escaping the Cycle of Scarcity

Fixes looks at solutions to social problems and why they work.

“Scarcity” is a new book that does something that I didn’t think possible: it says something new about whypeople are poor — and what to do about it.

Worrying about money when it is tight captures our brains. It reduces our cognitive capacity.

Here’s what’s not new: Poor people have more self -destructive habits than middle-class people. The poordon’t plan f or the f uture as much. Compared to middle-class people, the poor have less self -control and arequicker to turn to instant gratif ication. These habits perpetuate a cycle of poverty.

This is proven. The controversy is why it is the case. For conservatives, roughly speaking, these behaviorscause poverty. For liberals, also roughly speaking, poverty in many ways causes these behaviors. It is easy tosee how the stresses of poverty weigh in. With eating habits, f or example: f ruit and vegetables cost more thatmany unhealthier f oods, and might not be available in a poor neighborhood.

But there are behaviors the liberal view struggles to explain. Even when healthy f oods are available and madecheap, f or example, poor people take advantage of them f ar less.

Now Sendhil Mullainathan, a Harvard economist, and Eldar Shaf ir, a psychologist at Princeton, propose a wayto explain why the poor are less f uture-oriented than those with more money. According to these authors, oneexplanation f or bad decisions is scarcity — not of money, but of what the authors call bandwidth: the portionof our mental capacity that we can employ to make decisions.

Worrying about money when it is t ight captures our brains. It reduces our cognitive capacity — especially ourabstract intelligence, which we use f or problem-solving. It also reduces our executive control, which governsplanning, impulses and willpower. The bad decisions of the poor, say the authors, are not a product of badcharacter or low native intelligence. They are a product of poverty itself . Your natural capability doesn’tdecrease when you experience scarcity. But less of that capacity is available f or use. If you put a middle-classperson into a situation of scarcity, she will behave like a poor person.

The authors and two colleagues had a team of researchers approach shoppers at a mall in New Jersey. Peoplewere asked about their income and then classif ied (without their knowledge) as either poor or rich. Then theywere asked a question: your car needs a repair that will cost you $150. You can take a loan, pay in f ull, orpostpone service. How do you go about making this decision? Af ter they answered, the subjects took teststhat measured f luid intelligence and cognitive control.

Poor and rich people did equally well on the test.

But then the researchers changed one thing: instead of needing $150 f or the repair, they would need $1,500.The rich subjects did as well on the intelligence and willpower tests as they had bef ore. The poor group didnot.

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Their scores dropped the equivalent of losing 13 or 14 IQ points — larger than the drop experienced by peoplewho had just stayed up all night. Thinking about how to come up with $150 didn’t af f ect them. But thinkingabout coming up with $1,500 eroded their intelligence more than if they had been seriously sleep-deprived.

This result isn’t particular to New Jersey. The same team studied sugar cane f armers in India, testing theirintelligence just af ter the harvest, when they were f lush with cash, and bef ore it, when they were poor. Thesame f armers got 25 percent more questions right on the intelligence test when they were rich, and made 15percent more errors on the executive control test when they were poor.

Isn’t this just stress? We know how harmf ul stress can be. But Mullainathan and Shaf ir argue that the ef f ectsof scarcity go f urther. Its capture of our brains leads people into a tunnel; your only f ocus is solving theemergency of the moment. If the rent is due, you use money that would have gone to the car payment. Thef act that this will end in getting your car repossessed, and theref ore losing your job, doesn’t really register.You take very litt le notice of what’s outside the tunnel.

In this way, scarcity creates a vicious circle. Tunneling leads people to borrow to deal with the emergencyexpense. For the poor, borrowing is very costly. They take high- interest payday loans, buy on installment, paylarge credit-card f ees and interest. They “borrow” by paying bills late, which means they pay a substantialportion of their income in late f ees and reconnection f ees. These consequences, however, lie outside thetunnel — until paying those bills becomes the new emergency.

The authors designed complicated games to simulate conditions of scarcity. One was a version of the TVgame show “Family Feud,” played by Princeton students assigned at random to either have a lot of t ime toanswer questions or just a litt le. When researchers allowed players to borrow time f rom their f uture rounds athigh rates of interest, the time-poor players borrowed prof ligately, and their scores plummeted. When theloans could be rolled over — simulating real-world debt traps — the time-poor did even worse.

Mullainathan and Shaf ir write that the same mentality of scarcity that applies to the cash-poor also applies topeople who are overly busy and those who are dieting.People short of t ime also tunnel, borrowing time by postponing projects that are tomorrow’s emergency butnot today’s. And being hungry captures the mind in a way similar to being poor. People who are on strict dietsspend a lot of their bandwidth thinking about f ood.

The scarcity phenomenon is good news because to a certain extent, we can design our way around it.Awareness of the psychology of scarcity and the behavioral challenges it yields “can go some way towardimproving the modest returns of anti-poverty interventions,” Mullainathan and Shaf ir write.

Here are some examples:

Automate good decisions. Since we can’t be counted on to make good choices when we’re in the tunnel, wecan make them automatic. One decision to automate your choices will eliminate all those f uture opportunit iesto screw up. One way is to switch the def ault. For example, instead of making enrolling in a 401(k) savings planvoluntary, make not enrolling voluntary. This simple change has produced spectacular increases in usage of401(k)s, organ donation and AIDS testing. It can be used f or many outside-the-tunnel decisions, like buildingsavings: sign up to have part of your paycheck automatically deposited into a savings account. You can still getat it, but you have to take steps to do so.

Provide better options for borrowing. Employers of minimum wage workers of ten complain that theseworkers are unprepared f or their jobs, unf riendly to customers and distracted. Part of the reason may be thatthey are devoting litt le bandwidth to their jobs because they are worrying about how to live on their wages.

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The theories in “Scarcity” support the idea that paying them a living wage would increase productivity. But sincesome employers may balk at this, the book proposes a smaller step: remove some of the penalties that comewith borrowing.

Since poor people of ten have an urgent need f or small sums, they take a lot of payday loans. These loans,some of which have interest rates of more than 300 percent, cost workers hundreds of dollars in f ees. Theyare a scam designed to trap people in cycles of debt — 85 percent of payday loans go to people who takeseven or more loans each year. (See this report (pdf ) f or a thorough explanation of their horrors, and thiscolumn by Tom Edsall.)

One solution is to spread credit unions. Another is to expand workplace-based f inancial counseling andservices, like Neighborhood Trust‘s innovative Employer Solution.

Employers can help by paying weekly instead of bi-weekly, and by of f ering loans themselves with reasonableinterest rates. Better yet, a portion of the repayment could go automatically into a savings account f or eachworker, so they could eventually borrow f rom themselves.

Related

More From Fixes

Read previous contributions to this series.

Internationally, we now know that microcredit loans are of ten used to cover personal emergencies, not to startbusinesses. They are not well-suited to this, as they are usually too large and take too much time to get. (Thisis why even people with access to microcredit continue to go to pawn brokers and loan sharks.) Dhanei KGFS,a f inancial services provider in Orissa, India, pioneered a successf ul new product: small, low-interestemergency loans that clients of their bank had pre-qualif ied f or and could get at any time of day or night,nearly instantly.

Design services for the poor to take up less bandwidth. We know the poor are short of cash; we designf or that (most of the time). But we don’t think about their scarcity of bandwidth, and that should inf luenceservices as well. One good model is Single Stop, which operates more than 90 sites around the country wherelow-income people can apply f or benef its, do their taxes and get legal and f inancial advice.

Structure incentives to put them inside the tunnel. Since scarcity f orces us to tunnel, and concentrateonly on what’s inside that tunnel, incentives and penalties will work best when they can be inside, too. Thismeans very short deadlines and quick rewards — perhaps in several installments.

Telling people they can be on welf are f or only f ive years isn’t ef f ective. That deadline might not become part ofthe tunnel until they hit f our years and 11 months — too late to start looking f or a job. Mullainathan and Shaf ircall this the worst of both worlds: “it penalizes but f ails to motivate,” they write.

The same phenomenon explains why the death penalty, the three-strikes law and other harsh punishments f ailto deter criminals. No matter how harsh they are, they are f ar enough away to lie outside the tunnel.

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These design shif ts — the authors and others propose more of them on the behavioral economics sitewww.ideas42.org — are a small solution to a very big problem. But the theory is a new one. It needs more study— but part of that exploration will be trying out dif f erent models of antipoverty services that take bandwidthscarcity into account. It is f ar f rom the only reason people are poor, of course, but what’s particularly usef ulabout the idea of scarcity is that it is overarching; ease that burden, and people will be better able to deal withall the rest.

Join Fixes on Facebook and follow updates on twitter.com/nytimesfixes. To receive e-mail alerts for Fixescolumns, sign up at here.

Tina Rosenberg won a Pulitzer Prize for her book “The Haunted Land: Facing Europe’s Ghosts AfterCommunism.” She is a former editorial writer for The Times and the author, most recently, of “Join the Club: HowPeer Pressure Can Transform the World” and the World War II spy story e-book “D for Deception.”

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psmag.co m http://www.psmag.com/navigation/business-economics/poor-makes-poor-66414/

How Being Poor Makes You Poor

New research shows how poverty can of ten be a self -perpetuating trap.

Why are the rich rich and the poor poor? It ’s a question that gets asked a lot, and a question we shouldcontinue asking.

Do the wealthy simply work harder and f or longer hours? Are they more willing to take risks and makesacrif ices, while the destitute tend to sleep in past 10:00 a.m. and splurge all their cash on Cool Ranch DoritosTacos f rom Taco Bell? Or is it more circumstantial—meaning, are the haves f orged in homes where educationis valued and opportunity abundant, while the have nots come f rom generation af ter generation of justscraping by?

According to the BBC, income inequality in the U.S. has grown f or nearly three decades, and in 2012 thisdisparity reached record-breaking proportions when the top one percent of U.S. earners collected 19.3 percentof all household income. For some policymakers and members of the public, this is a problem—and it ’s aproblem that cannot properly be addressed without examining both the personal and systemic reasons f or whysome end up so rich while others end up so poor.

New research f rom a behavioral economist at Harvard and a cognitive psychologist at Princeton might helpuntangle this ongoing conundrum, if only just a strand or two. In their recently released book, Scarcity: WhyHaving Too Little Means So Much, Sendhil Mullainathan and Eldar Shaf ir suggest that those living paycheck topaycheck aren’t as much in their situation because they’re bad f inancial planners with a history of self -sabotage, but rather that they’re bad f inancial planners with a history of self -sabotage because of theirsituation. It ’s a subtle yet signif icant shif t.

Relying on data collected f rom numerous tests and experiments, the co-authors argue that the mental toll ofconstantly having to deliberate over which credit card should be paid down f irst or jar of peanut butter placedinto the shopping cart depending on the sale both depletes one’s cognitive resources and diminishes theimportance of planning f or tomorrow, since today’s demands f eel just so damn demanding. In other words,when you’re struggling with the necessity of treading water, the ability to calculate which shoreline is closestbecomes a luxury.

“The poor and the rich perform equally well in one context , and then when you impose thecontext of scarcity, all of a sudden [the poor] perform less well, even though it ’s the samepeople.”

“Give your computer 16 programs to run at once, and everything slows down,” Shaf ir told me. “It ’s just doingtoo much at once.”

But enough with the metaphors. On to the empirical evidence.

IN ONE EXPERIMENT, THE authors asked participants to imagine that their car required a repair costing $300,which they could either pay f or immediately, take out a loan to cover, or ignore completely. The authors thenprovided the participants with a series of computer-based questions intended to measure their capacity f orlogical thinking, cognitive f unction, and problem solving. All of the participants, whether rich or poor,demonstrated a similar level of intelligence.

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However, when the authors repeated this experiment using a repair costing $3,000, the poor f ared f ar worsethan the rich, sometimes dropping up to 13 IQ points, or the equivalent of one night’s sleep.

In a f ield study, Mullainathan and Shaf ir provided sugar cane f armers in India with psychological tests both rightbef ore the harvest, when most had litt le money, and just af ter the harvest, when most were temporarilyaf f luent. The results went as expected: the f armers perf ormed much better on the tests post-harvest.

Based on their f indings, then, it appears that the presence of scarcity somehow creates tunnel vision in thebrain. While this outlook helps f ocus the mind on urgent issues, it also clouds any and all appointments,errands, and aspirations currently residing on the periphery. A lif e of poverty, then, tends to perpetuate poverty.

“Mental bandwidth is what we use to devote attention, make decisions, and resist temptation—it’s whatpsychologists call ‘proactive memory,’” Shaf ir said. “It ’s long been know that proactive memory is hurt when youload your working memory. If you have to remember a seven-digit number, f or example, you will remember lessof what you need to do. Just by loading your bandwidth and your working memory, you’ll do many thingswrong.”

And yet the authors’ research isn’t limited to the poor and their lack of money, either. In Scarcity, Mullainathanand Shaf ir argue that this narrowed mindset can occur in anyone f or a multitude of reasons, whether it ’sthrough a dearth of t ime, f ood, or f riendship. No one is immune.

“We’re very caref ul to point out that this is not about poor people—this is about people who inhabit thecontext of poverty,” Shaf ir said. “Think about being hungry. If you’re hungry, that’s what you think about. Youdon’t have to strain f or years—the minute you’re hungry, that’s where your mind goes.”

FOR CRITICS WHO INSIST that the authors have indeed conf used the order of cause and ef f ect—that thepoor are poor because they lack intelligence and willpower, à la Romney’s 47 percent, and not the other wayaround—Shaf ir maintains that’s simply not the case.

“In some sense, the most excit ing part of our studies is that whatever it is you think made people poor, what Iknow is that everything we’re getting has to do very clearly with the context of being poor, not with the peoplethemselves,” Shaf ir said. “The poor and the rich perf orm equally well in one context, and then when you imposethe context of scarcity, all of a sudden [the poor] perf orm less well, even though it ’s the same people.”

While what the authors are describing is somewhat dif f erent than stress—which, in the right quantit ies, can bea benef icial f orce f or completing a task—all of this might seem rather obvious to those who live in chronicpoverty or have undergone a period of f inancial hardship. Being broke is tough. Not only does a lack of moneyrestrict what you can do, but now your survival also involves an endless amount of compromise over the mostbasic of goods and services. To return to the bandwidth metaphor, it ’s like browsing the Internet while yourcomputer downloads a f ile, ad inf initum. It ’s impossible to stop dwelling on unpaid utility bills when you haveabsolutely no idea how you’re going to pay them.

But judging by America’s polarized polit ical landscape, what’s commonsense to some isn’t common to all. Inlight of this, Shaf ir says he hopes the data will create an “empathy bridge” between the opposing camps, andperhaps also demystif y the poor ’s plight f or some policymakers in Washington. Practical solutions the authorsof f er include automatically depositing wages into savings accounts and pill bottles that glow when they haven’tbeen opened in a while. Basically, anything that serves to liberate bandwidth.

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As f ormer U.S. Secretary of Labor Robert Reich says in the upcoming documentary f ilm Inequality for All, “Of alldeveloped nations, the United States has the most unequal distribution of income, and we’re surging towardeven greater inequality.” It ’s a trajectory toward prosperity f or some and ruin f or the rest. Although Mullainathanand Shaf ir ’s research certainly doesn’t address every f acet related to this growing disparity, it does directlyconf ront the complicated question of why the poor have such a dif f icult t ime, as some like to say, pullingthemselves up by their own bootstraps.

Paul Hiebert is the editor of Ballast, a Canadian-centric Website about culture and polit ics. Follow him onTwitter @hiebertpaul.

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healt hland.t ime.co mhttp://healthland.time.com/2013/08/30/how-financial-woes-change-your-brain-and-not-fo r-the-better/print/

Aug. 30, 2013

How Financial Woes Change Your Brain (And Not for the Better)

Brad Killer / Getty Images

Related

Worrying about making ends meet, it seems, can occupy enough of the brain‘s f inite thinking power that itmakes it dif f icult to think clearly.

According to the latest research published in Science, just thinking about shaky f inances can drop IQ by theequivalent of 13 points. That may help to explain why poverty can become a vicious cycle, with lower incomepeople tending to make seemingly irrational and risky decisions, particularly when it comes to money.

To determine how budgetary concerns af f ect thinking, the researchers examined the ef f ects of f inancial strainamong both a group of shoppers at a New Jersey mall and impoverished sugarcane f armers in rural India. Themall visitors had household incomes ranging f rom $20,000 to $150,000, with a median income of $70,000. Thef armers were relatively f lush with cash at harvest— but desperately poor f or most of the rest of the year.

The shoppers considered a range of f inancial dif f icult ies, f rom having to take small pay cuts to larger ones, orto suddenly being f aced with minor or more expensive car repairs. They were asked about how they wouldcope with such problems— by borrowing, cutting spending or skipping the car repair and hoping f or the best.Then they took tests to measure IQ and their cognitive skills.

When conf ronted with relatively minor f inancial problems, the lower income people perf ormed equally well onthe tests as higher income f olks. But when f aced with more serious f inancial concerns, the lower incomeindividuals did much worse than their wealthier counterparts. In f act, in one version of the experiment whereparticipants were paid f or each correct answer, the rich earned 18% more than those who weren’t as well of f .

The f indings among the Indian sugarcane f armers were almost as strong. The researchers tested 464 f armersbef ore and af ter harvest, when their f inances were drastically dif f erent. When the f armers had cash af terharvest, they perf ormed well on the cognitive tests. But bef ore harvest, when money was scarcer, they didmuch worse— showing a decline similar to the loss of 10 IQ points.

With half the American population living f rom paycheck to paycheck, the study’s lead author Eldar Shaf ir,prof essor of psychology and public af f airs at Princeton University, says the f indings are relevant tounderstanding how f inancial circumstances inf luence intellectual ability.

“There’s always been this perception that the poor f unction less well,” says Shaf ir, “But it ’s not the person, it ’sthe situation they’re in and anyone could f ind themselves there.” Previous studies have f ound the poor to begenerally less productive, less attuned as parents, and to have lower IQs— f indings that are apparently linkedto the stress of poverty. But those studies also lef t the impression that these f actors might be causes ofpoverty, while the latest research suggests that they may be the result.

“These authors came up with very clever, elegant research designs that give us strong evidence about onecause of the sometimes counterproductive behaviors of the poor,” says Martha Farah, director of the Centerf or Neuroscience and Society at the University of Pennsylvania, who was not associated with the study.

MORE: Why Self Disciplined People Are Happier (And Not as Deprived as You Think) 10

And while it ’s tempting to think stress explained these results, that wasn’t the case. Even af ter controlling f orstress hormone levels, researchers f ound that the poor did worse.

“When you don’t have enough [money], it occupies your mind and takes away bandwidth that you could use f orother things,” says Shaf ir, in explaining the f indings. And numerous studies conf irm that when mental loadincreases, decision-making quality goes down. That’s why people tend to make worse choices at the end ofthe day— or af ter making multiple decisions, even if some were trivial.

Can you overcome the problem by not allowing yourself to be overwhelmed, or by convincing yourself that youhave more mental thinking power than you actually do? While some studies f ound that such mental gymnasticscould boost cognitive bandwidth, they may only work up to a point. Posit ive thinking alone, it seems, isn’tenough to tackle a heavy mental load.

MORE: How Economic Inequality Is (Literally) Making Us Sick

But actively making “space” in your brain to address challenges as they occur might be one way to avoidcompromising your thinking skills. Creating routines, or def ault choices — such as what you eat f or breakf ast,or what you wear f or certain events — can leave your brain ready to take on unexpected problems withoutgetting overwhelmed. And scheduling events that require decision-making earlier in the day, bef ore experiencesand worries occupy your attention, could also help. Recognizing that worry can be distracting is also essential,so avoiding important choices when you’re f ocused on something stressf ul also makes sense, says Shaf ir.Making smart choices is about more than just being smart — it also involves being in the right state of mind tolet your cognitive powers do their thing.

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t heguardian.co m http://www.theguardian.com/books/2013/aug/23/scarcity-sendhil-mullainathan-eldar-shafir/print

Oliver Burkeman

Scarcity: Why Having Too Little Means So Much by SendhilMullainathan and Eldar Shafir – review

Indian sugar cane f armers perf ormed worse in intellegence tests pre-harvest, when money was tight, comparedto post-harvest. Photograph: Amit Bhargava/Corbis

The Guardian, Friday 23 August 2013 04.00 EDT

Behind every coalit ion promise to "get tough on single mothers", behind every Daily Mail story about Britain's"handout culture", or Mitt Romney's notorious comments about "the 47%", there lies an assumption: that beingpoor is a f ailure of character. Awkwardly, f or those who f ind this obnoxious, the research sometimes makes itseem true. People who are less well-of f really do appear to give in more readily to temptation, making the verypurchases they can't af f ord; to make unwise f inancial decisions; to use less ef f ective parenting techniques; orto f ail to take lif e-saving drugs, even when they're f ree. Is this a deep-seated weakness of will, made worse bya "culture of dependency"? The Harvard economist Sendhil Mullainathan and the Princeton psychologist EldarShaf ir reject that idea, and some of the most f amiliar lef twing responses, too. Poverty, they argue, is indeed amatter of willpower and bad decisions, but the Mail has it back-to-f ront. It 's not that f oolish choices make youpoor; it 's that poverty's ef f ects on the mind lead to bad choices. Living with too litt le imposes huge psychiccosts, reducing our mental bandwidth and distorting our decisionmaking in ways that dig us deeper into a badsituation.

1. Tell us what you think: Star-rate and review this book

Of course, it 's hardly news that poverty creates a vicious cycle. Not having money is expensive, thanksto credit card late f ees, high interest rates on payday loans, the extra cost of buying in instalments, and so on.But the alarming conclusion of this book is how completely scarcity colonises the mind. Merely asking poorerpeople to contemplate a hypothetical £1,000 car repair, one study by the authors shows, impairs theirperf ormance on intelligence tests as much as missing a night's sleep – about 13 or 14 IQ points. In anotherstudy, Indian sugar cane f armers perf ormed worse pre-harvest, when money was tight, compared to post-harvest. "Scarcity captures the mind," explain Mullainathan and Shaf ir. It promotes tunnel vision, helping usf ocus on the crisis at hand but making us "less insightf ul, less f orward-thinking, less controlled". Wise long-term decisions and willpower require cognitive resources. Poverty leaves f ar less of those resources at ourdisposal.

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Their most arresting claim is that the same ef f ects kick in – albeit not always with such grave implications – inany conditions of scarcity, not just lack of money. Chronically busy people, suf f ering f rom a scarcity of t ime,also demonstrate impaired abilit ies and make self -def eating choices, such as unproductive multi- tasking orneglecting f amily f or work. Lonely people, suf f ering f rom a scarcity of social contact, become hyper- f ocusedon their loneliness, prompting behaviours that render it worse. In one sense, Mullainathan and Shaf ir concede,scarcity is so ubiquitous as to be almost meaningless. But the feeling of scarcity – of not having as much ofsomething as you believe you need – is something more specif ic and agonising. To use the authors' f avouritemetaphor, lif e under such conditions is like packing a tiny suitcase f or a trip. It entails a ceaseless f ocus ondif f icult trade-of f s: the umbrella or the extra sweater? The greatest f reedom that money can buy is thef reedom f rom thinking about money – or, to quote Henry David Thoreau, "a man is rich in proportion to thenumber of things he can af f ord to let alone".

There's a risk here of lapsing into the obvious: rich and relaxed is better than poor and time-starved.Mallainathan and Shaf ir do sometimes succumb; f inancial abundance, we are gravely inf ormed, "allows us tobuy more things". Yet the strongest chapters demonstrate that the psychological ef f ects of scarcity aren'tobvious at all. In certain limited ways, f or example, poverty actually conf ers cognitive benef its. Some of theclassic f indings about how irrational we are when it comes to money – such as our willingness to travel acrosstown to save £5 on a cheap toaster, but not on a f latscreen TV – apply much less to the poor. Dieters,experiencing a scarcity of f ood, are signif icantly better than others at identif ying words brief ly f lashed on ascreen, provided that they're about f ood. Lonely people read f acial expressions more accurately. And time-scarcity brings motivational benef its, as any journalist on a deadline could tell you.

But these posit ive ef f ects of tunnel vision are outweighed by what the authors call "the bandwidth tax",the ways scarcity limits or distorts our skills. This tax, they argue persuasively, explains a number of otherwiseconf ounding kinds of self -def eating behaviour among those suf f ering scarcity – f rom the f ailure of poorerf armers in Af rica to weed their f ields, even though they have the time to do so and would make more moneythat way, to the f ailure of low-income Americans to take diabetes drugs and other medications, or to eat morehealthily even when it 's f inancially viable. "The f ailures of the poor are part and parcel of the misf ortune ofbeing poor in the f irst place," they write. It 's not that poor people have less bandwidth. It 's that "all people,if they were poor, would have less ef f ective bandwidth".

The bandwidth argument threatens to undermine much received polit ical wisdom on poverty. Get- toughpolicies, like cutting of f access to benef its af ter a f ixed number of years, won't motivate people to f ind jobs: adeadline of several years is too distant to f eature in the calculations of people only concerned with paying thenext bill. On the other hand, well- intended interventions like providing f inancial education or job-readinesstraining could backf ire, too. Another class to attend, another item to tick of f the to-do list – all use up morebandwidth, potentially impairing people's capacities more than improving them.

How can we stop f alling into these traps? Mullainathan and Shaf ir of f er a f ew "nudge"-style suggestions.Where possible, systems should be designed so that inattentiveness leads to better outcomes, f or example bymaking savings schemes opt-out, not opt- in. Benef icial behaviours could be "brought inside the tunnel": theauthors describe their own experiments with an "impulse savings" scheme, involving cards sold at supermarkettills, resembling gif t vouchers, but which credit the purchaser's savings account instead. And behaviours thatrequire constant, energy-depleting vigilance (like trying to resist non-essential spending) should be replaced byone-of f actions (like automatically transf erring a percentage of your wages to a savings account). But theywisely don't pretend to of f er a comprehensive solution. The tendrils of scarcity reach too deep into the mind.Poor people need more money, not self -help tricks.

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The overall result is a rather odd but ult imately humane and very welcome book. Presenting itself as yetanother "big idea" tome that will reveal the unexpected f orce that explains the world, Scarcity ends upreaf f irming one of the oldest truths: that what really explains the world is its division into haves and have-nots.The clear message to those with resources – money, t ime, or anything else – is to resist the urge to judgethose without them. If you f aced the same scarcity, Mullainathan and Shaf ir demonstrate, you'd make the samemistakes. Indeed, in some area of your lif e – if not your spending, then your work/lif e balance or your diet –you're almost certainly already doing so.

• Oliver Burkeman's The Antidote is published by Canongate.

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washingt o npo st .co mhttp://www.washingtonpost.com/national/health-science/poverty-strains-cognitive-abilities-opening-door-for-bad-decision-making-new-study-finds/2013/08/29/89990288-102b-11e3-8cdd-bcdc09410972_print.html

By Brady Dennis

Poverty strains cognitive abilities, opening door for baddecision-making, new study finds

Poverty consumes so much mental energy that people struggling to make ends meet of ten have litt lebrainpower lef t f or anything else, leaving them more susceptible to bad decisions that can perpetuate theirsituation, according to a study published Thursday in the journal Science.

“Past research has of ten blamed [poverty] on the personal f ailings of the poor. They don’t work hard enough;they’re not f ocused enough,” said University of Brit ish Columbia prof essor Jiaying Zhao, who co-authored thestudy as a Princeton University graduate student. “What we’re arguing is it ’s not about the individual. It ’s aboutthe situation.”

As part of the study, researchers conducted experiments on two groups of subjects: low- and middle- incomeshoppers in a mall in New Jersey, and sugar cane f armers in rural India.

In the mall experiment, shoppers underwent a battery of tests to measure IQ and impulse control. However,half the participants were f irst given a “teaser” question — what they would do if their car had broken downand needed $1,500 worth of repairs — designed to put a pressing f inancial concerns at the f oref ront of theirthoughts.

In India, researchers tested the cognitive capacity and decision-making of f armers bef ore the sugar caneharvest, when they were most strapped f or money, and af terwards, when they had f ewer f inancial woes.

The results showed that people wrestling with the mental strain of poverty suf f ered a drop of as much as 13points in their IQ — roughly the same f ound in people subjected to a night with no sleep.

“Poverty is the equivalent of pulling an all-nighter,” said Harvard economist Sandhil Mullainathan, another of thestudy’s authors. “Picture yourself af ter an all-nighter. Being poor is like that every day.”

Mullainathan said previous research of ten has assumed that poor people are poor because they are somehowless capable than others, whether inherently or because of past trauma or other environmental f actors in theirlives. But, he said, what the latest study suggests is that the strain of poverty can tax the cognitive abilit ies ofanyone experiencing it — and that those abilit ies return when the burden of poverty disappears.

“While the poor may be experiencing a scarcity of money, at some level what they may really be experiencing isa scarcity of bandwidth, of cognitive capacity,” he said. “It ’s the situation that’s creating the stress.”

Zhao and Mullainathan said that their f indings, if accurate, could have prof ound implications f or public policy.

For starters, policymakers “should beware of imposing cognitive taxes on the poor just as they avoid monetarytaxes on the poor,” the paper states. Filling out long f orms, deciphering complicated rules or undergoinglengthy interviews can consume scarce cognitive resources.

“You are captured by these monetary issues — how to pay rent, how to pay bills,” Zhao said. “As a result,you’re less attentive to other problems. You neglect other things in lif e that deserve your attention.”

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t heguardian.co m http://www.theguardian.com/science/2013/aug/29/poverty-mental-capacity-complex-tasks/print

Alok Jha , science correspondent

Poverty saps mental capacity to deal with complex tasks, sayscientists

The strain of poverty may mean people are more likely to make bad decisions that exacerbate their f inancialproblems. Photograph: Dan Kitwood/Getty Images

Poor people spend so much mental energy on the immediate problems of paying bills and cutting costs thatthey are lef t with less capacity to deal with other complex but important tasks, including education, training ormanaging their t ime, suggests research published on Thursday.

The cognitive def icit of being preoccupied with money problems was equivalent to a loss of 13 IQ points,losing an entire night's sleep or being a chronic alcoholic, according to the study. The authors say this couldexplain why poorer people are more likely to make mistakes or bad decisions that exacerbate theirf inancial dif f icult ies.

Anandi Mani, a research f ellow at the Centre f or Competit ive Advantage in the Global Economy at theUniversity of Warwick, one of the f our authors of the study, said the f indings also suggest how smallinterventions or "nudges" at appropriate moments to help poor people access services and resources couldhelp them break out of the poverty trap. Writ ing in the journal Science, Mani said previous research has f oundthat poor people use less preventive health care, do not stick to drug regimens, are tardier and less likely tokeep appointments, are less productive workers, less attentive parents, and worse managers of their f inances."The question we theref ore wanted to address is, is that a cause of poverty or a consequence of poverty?"

She said the team of researchers, which included economists and psychologists in the UK and the US, wantedto test a hypothesis: "The state of worrying where your next meal is going to come f rom – you have uncertainincome or you have more expenses than you can manage and you have to juggle all these things andconstantly being pre-occupied about putting out these f ires – takes up so much of your mental bandwidth, thatyou have less in terms of cognitive capacity to deal with things which may not be as urgent as your immediateemergency, but which are, nevertheless, important f or your benef it in the medium or longer term."

To test their idea, the team carried out two sets of studies.

In the f irst they approached around 400 people at random in a shopping mall in New Jersey and asked them tothink about how they might solve a f inancial problem.

Volunteers were given an "easy" scenario, where the cost of a car repair was around $150, and a "hard"scenario, where the repair would cost more like $1,500.

While they thought about this, the volunteers took part in puzzle-based IQ tests and tasks that measured theirattention.

The researchers compared the change in perf ormance in the tests f or rich and poor people across the twoscenarios, with rich and poor def ined as being either side of the median US household income of $70,000 peryear.

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In the second study, the team carried out IQ and attention tests on 464 sugar cane f armers in Tamil Nadu inIndia during cyclical conditions of relative wealth and poverty. Because of the long crop cycle f or sugar cane,f armers tend to be poor just bef ore a harvest and relatively well of f a f ew weeks af ter the harvest, when theyhave received their annual crop earnings.

In the shopping mall experiment, rich and poor people perf ormed equally well on the "easy" scenario.

But poorer people perf ormed much worse on the "hard" scenario – their average IQ was 13 points lower whenthey were thinking about serious f inancial troubles.

"That's the dif f erence in IQ between a person who is a normal adult versus a chronic alcoholic," said Mani. "Interms of age, it 's like an average 45-year old as opposed to an average 60-year-old. In terms of sleep loss,[the immediate impact of the mall study] is like losing a f ull night of sleep."

For the Indian f armers there was a similar but smaller ef f ect.

"What we did is look at the same people the month bef ore and the month af ter the harvest, and what we see isthat IQ goes up, cognitive control, or errors, goes way down, and response times go way down," said SendhilMullainathan, a prof essor of economics at Harvard University and a co-author of the study. "The ef f ect here isabout two-thirds of the size of the ef f ect f ound in the mall study – it 's at least nine or 10 IQ points, justbetween these months."Between these two studies, you both see the mechanism at work, and you see that, inthe real world, these ef f ects are enormous.In their study, the researchers controlled f or possible mitigatingf actors such as stress, quality of nutrit ion, available time and also the f act that people can sometimes getbetter at cognitive tests once they have tried them out a f ew times.

Mullainathan added that "the results are not suggesting that the poor as people have less cognitive capacitybut that anyone experiencing poverty would have less capacity. I realise this is basic but it is such an easymistake to make in interpreting the conclusion."

Jennif er Wild, a clinical psychologist at the University of Oxf ord, who was not involved in the study, said thelatest results were novel because, previously, researchers "may have thought that environmental conditions,such as lower levels of education, explained the link between poverty and poorer perf ormance on some tasksof intelligence compared to the rich."

She added that a limitation of the study was that the researchers had not studied how the f inancial questionsin the shopping mall scenario had af f ected the emotional states of the participants. The $1,500 amount in the"hard" scenario may have f ailed to inf luence the cognitive processing of participants with higher incomesbecause it might have been too low to be meaningf ul to them, she said.

"The f igure of $1,500 may have led to anxiety in low income participants, which could have inf luenced theirperf ormance. The study f ailed to look at af f ective state. How much anxiety did the imagined scenarios createand were their dif f erences in how anxious high and low income participants f elt, which could explain theredif f erences in perf ormance?"

Mani said that the results of the study had implications f or policymakers. "When we think of poor people anddesign policies and programmes to help them, we are only particularly cognizant of the f act that they have lessmaterial resources," she said. "I think that programmes don't of ten appreciate that they're also, preciselybecause of poverty, a bit challenged in terms of the mental resources and attention that they have. To theextent that we want to make anti-poverty programmes ef f ective, we want to design them in a way that ismindf ul of that."

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This could mean helping poorer high school students f ill in application f orms f or f inancial aid rather thanleaving them to do it by themselves. Rather than assuming that many of the poor are not taking advantage ofbenef icial schemes through lack of motivation or interest, said Mani, help with "small nudges at the right t imeand limiting the amount of cognitive load that become barriers to them enrolling in the programme could make abig dif f erence."

Other kinds of help could include sending text reminders to take pills or deposit money f or a specif ic savingsgoal they have, said Mani. "When they have 20 things that are grabbing their attention, which seem very urgent,to remind them of something that's important at the right t ime, that's also an ef f ective strategy."

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t heat lant ic.co mhttp://www.theatlantic.com/business/archive/2013/11/your-brain-on-poverty-why-poor-people-seem-to-make-bad-decisions/281780/

Your Brain on Poverty: Why Poor People Seem to Make BadDecisions

And why their "bad" decisions might be more rational than you'd think.

Shoppers at a f ood pantry. (Reuters)

In August, Science published a landmark study concluding that poverty, itself , hurts our ability to makedecisions about school, f inances, and lif e, imposing a mental burden similar to losing 13 IQ points.

It was widely seen as a counter-argument to claims that poor people are "to blame" f or bad decisions and arebuke to policies that withhold money f rom the poorest f amilies unless they behave in a certain way. Af ter all,if being poor leads to bad decision-making (as opposed to the other way around), then giving cash shouldalleviate the cognitive burdens of poverty, all on its own.

Sometimes, science doesn't stick without a proper anecdote, and "Why I Make Terrible Decisions," a commentpublished on Gawker's Kinja platf orm by a person in poverty, is a devastating illustration of the Science study.I've bolded what I f ound the most moving, insightf ul portions, but it 's a moving and insightf ul testimony all theway through.

I make a lot of poor financial decisions. None of them matter, in the long term. I will nevernot be poor, so what does it matter if I don’t pay a thing and a half this week instead of justone thing? It’s not like the sacrifice will result in improved circumstances; the thing holding meback isn’t that I blow five bucks at Wendy’s. It’s that now that I have proven that I am a Poor Personthat is all that I am or ever will be. It is not worth it to me to live a bleak life devoid of small pleasuresso that one day I can make a single large purchase. I will never have large pleasures to hold on to.There’s a certain pull to live what bits of life you can while there’s money in your pocket, because nomatter how responsible you are you will be broke in three days anyway. When you never haveenough money it ceases to have meaning. I imagine having a lot of it is the same thing.

Poverty is bleak and cuts off your long-term brain. It’s why you see people with four differentbabydaddies instead of one. You grab a bit of connection wherever you can to survive. You haveno idea how strong the pull to feel worthwhile is. It’s more basic than food. You go to thesepeople who make you feel lovely for an hour that one time, and that’s all you get. You’re probablynot compatible with them for anything long-term, but right this minute they can make you feelpowerful and valuable. It does not matter what will happen in a month. Whatever happens in amonth is probably going to be just about as indifferent as whatever happened today or last week.None of it matters. We don’t plan long-term because if we do we’ll just get our hearts broken.It’s best not to hope. You just take what you can get as you spot it.

When neuroscientists Joseph W. Kable and Joseph T. McGuire studied time, uncertainty and decision-making,they f ound that virtues like patience and self -control weren't as simple previous studies suggested. In theubiquitous Marshmallow study, f or example, kids who ate the treat quickly were deemed impatient and kids whowaited had self -control and, on the whole, went on to lead more productive lives, the study f ound.

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But rational self -control in the real world, Kable says, isn't so black-and-white. Perhaps you have enoughpatience to wait an hour f or a train, or to lose one pound each week with exercise and dieting. That soundsresponsible. But what happens if the train isn't there in 90 minutes? If you never lose weight and you're makingyourself miserable with your diet? Maybe you should give up! "In this situation, giving up can be a natural —indeed, a rational — response to a time f rame that wasn’t properly f ramed to begin with," Maria Konnikovasummed it up f or the Times.

As Andrew Golis points out, this might suggest something even deeper than the idea that poverty's stressinterf eres with our ability to make good decisions. The inescapability of poverty weighs so heavily on theauthor that s/he abandons long-term planning entirely, because the short term needs are so great and thelong-term gains so implausible. The train is just not coming. What if the psychology of poverty, which canappear so irrational to those not in poverty, is actually "the most rational response to a world of chaos andunpredictable outcomes," he wrote.

None of this is an argument against poorer f amilies trying to save or plan f or the long-term. It 's an argumentf or context. As Eldar Shaf ir, the author of the Science study, told The Atlantic Cities ' Emily Badger: “All the datashows it isn't about poor people, it ’s about people who happen to be in poverty. All the data suggests it is notthe person, it 's the context they’re inhabiting.”

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o pinio nat o r.blo gs.nyt imes.co mhttp://opinionator.blogs.nytimes.com/2014/01/04/can-upward-mobility-cost-you-your-health/?hp&rref=opinion&_r=0

By GREGORY E. MILLER , and EDITH CHEN and GENE H. BRODY

Can Upward Mobility Cost You Your Health?

The Great Divide is a series about inequality.

Americans love a good rags-to-riches story. Even in an age of soaring inequality, we like to think that peoplecan still make it big here if they work hard and stay out of trouble. The socioeconomic reality of most of thelast f our decades — stagnant wages, soaring income and wealth inequality, and reduced equality ofopportunity — have dented, but not destroyed, the appeal of the American dream.

Those who do climb the ladder, against the odds, of ten pay a litt le-known price: Success at school and in theworkplace can exact a toll on the body that may have long-term repercussions f or health.

Among American children there are wide socioeconomic gaps on many dimensions of well-being: schoolachievement, mental health, drug use, teenage pregnancy and juvenile incarceration, to name just a f ew.Despite the risks that lower- income children f ace, we also know that a signif icant minority beat the odds. Theyperf orm admirably in school, avoid drugs and go on to college.

Psychologists ref er to these children as resilient, because they achieve posit ive outcomes in adversecircumstances. They do so in part by cult ivating a kind of determined persistence. Of ten with nurturing f rom aparent, relative or mentor, they set goals f or the f uture, work diligently toward them, navigate setbacks, stayf ocused on the long term and resist temptations that might knock them of f the ladder to success.

Several years ago, we began studying these resilient young people, trying to f ind out if their success storiesalso translated into physical health benef its. We reasoned that, if disadvantaged children were succeedingacademically and emotionally, they might also be protected f rom health problems that were more common inlower- income youth. As it turned out, the exact opposite was true. These young people were achieving successby all conventional markers: doing well academically, staying out of trouble, making f riends and developing apositive sense of self . Underneath, however, their physical health was deteriorating.

Our f irst hints of this pattern came f rom a study of 489 rural Af rican-American young people in Georgia, whomone of us, Gene Brody, has been tracking f or more than 15 years. Most came f rom f amilies who were workingbut poor. In 2010, their average f amily income was about $12,000 a year; about half lived below the poverty line.We f ound a subgroup of resilient children who, despite these obstacles, were rated, at age 11, by theirteachers as being diligent, f ocused, patient, academically successf ul and strong in social skills.

We f ollowed these young people until they were 19 and studied their mental and physical health, f ocusing ondepression, drug use, aggression and criminal behavior. As in past studies, those who were rated posit ively atage 11 had relatively f ew of these problems when they were 19. When we looked beneath the surf ace, though,these apparently resilient young people were not f aring well. Compared with others in the study, they weremore obese, had higher blood pressure and produced more stress hormones (like cortisol, adrenaline andnoradrenaline). Remarkably, their health was even worse than peers who, at age 11, had been rated byteachers as aggressive, dif f icult and isolated. They were at substantial risk f or developing diabetes orhypertension down the line.

Edel Rodriguez

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We continued studying these youth as they transit ioned into adulthood. Perhaps not surprisingly, the lower-income youth who made it to college used f ewer drugs and drank less alcohol. To be academically competit ivewith their classmates, they had to stay f ocused on their schoolwork. As in the f irst study, though, theirresilience was only skin deep. At age 20, the lower- income college kids had greater obesity, higher bloodpressure and more stress hormones than those who did not make it to college. (Their health was also worsethan that of peers in more af f luent, educated neighborhoods.)

These patterns mesh with other social-science f indings, which suggest that upward mobility does not alwaysprovide the expected “return on investment” when it comes to health. If we look at the lif e expectancyassociated with a college education, blacks gain about f our f ewer years f rom bachelor ’s degrees than dowhites. In f act, black college graduates have shorter lif e expectancies than do white high school graduates.

What is it about upward mobility that undermines the health of these young Americans? In our studies, mostparticipants are the f irst in their f amilies to attend college. They f eel tremendous internal pressure to succeed,so as to ensure their parents’ sacrif ices have been worthwhile. Many f eel socially isolated and disconnectedf rom peers f rom dif f erent backgrounds. They may encounter racism and discrimination.

Some young people respond to the pressure by doubling down on character strengths that have served themwell, cult ivating an even more determined persistence to succeed. This strategy, however, can backf ire when itcomes to health. Behaving diligently all of the time leaves people f eeling exhausted and sapped of willpower.Worn out f rom having their noses to the grindstone all the time, they may let their health f all by the wayside,neglecting sleep and exercise, and like many of us, overindulging in comf ort f oods.

Sherman A. James , a sociologist at Duke University, calls this single-minded determination to succeed anduncompromising work ethic, even in the f ace of overwhelming odds, “John Henryism,” af ter the legend of ablack railroad worker who, in the 19th century, was said to have def eated a steam-powered drill in a steel-driving contest, only to drop dead of exhaustion. Mr. James has shown that lower- income Af rican-Americanmen who express these traits have a greater risk f or hypertension as they age.

What can we do to mitigate these negative health ef f ects? To start, schools and colleges that serve lower-income students could provide health education, screenings and checkups as a part of their curriculum. Thiswould allow us to detect and address incipient health problems bef ore they become serious. Second, schoolsand clinics could of f er stress management programs, targeting lower- income, higher-achieving young people,to help them balance the competing demands on their minds and bodies.

Finally, we could develop programs to help these young people blow of f steam in productive ways. We couldpair them with mentors who have navigated similar lif e challenges and sponsor group physical activit ies. Ofcourse, much more could be done: huge investments in primary education, so that kids have both theopportunity and preparedness to attend college, and f ace less social isolation, discrimination and alienation.

But f or now, policy makers should do everything they can so that those young people who overcome so muchto live the American dream have the health to enjoy the f ruits of their ef f orts.

Gregory E. Miller and Edith Chen are professors of psychology and fellows of the Institute for Policy Research atNorthwestern University. Gene H. Brody is professor of human development and family studies and the director ofthe Center for Family Research at the University of Georgia.

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