Struggling to ‘get by’ is stressful. We worry whether we can make it to our next paycheck, whether a trip to the market will be successful, whether we can pay the rent on-time… the list goes on.
All of this stress leads to an attention shortage, known as bandwidth poverty. Bandwidth poverty creates a negative, reinforcing cycle. When we experience financial poverty, we focus on the immediate need to make money or to pay a bill, and we don’t have sufficient cognitive resources or bandwidth to spend on other tasks or later deadlines. This leads to less-than-optimal decisions that leave us worse-off because we’ve lost the capacity or mental space to consider future needs.
In a series of experiments, researchers from Harvard, Princeton and Britain's University of Warwick found that urgent financial worries had an immediate impact on poor people's ability to perform well in tests of cognition and logic.
The researchers conducted two sets of experiments— in two very different settings— one in a mall in suburban New Jersey and one involving sugar cane farmers in rural India.
In the New Jersey experiment, middle and low-income test subjects were asked to consider what they would do if their cars needed repairs. They were given two scenarios: one in which the car repairs cost $150 and one in which the repairs cost $1,500. For the average mall shopper in New Jersey $150 is a lot, but it is manageable. $1,500, on the other hand, represents a significant strain on most shoppers’ budgets.
The participants then performed tasks requiring cognitive skills, such as choosing which shape fits in a pattern of shapes. The results were clear: when the financial scenario was not too daunting, the poor and rich participants performed equally well, but when the scenario was more severe, the poor participants performed significantly worse than their richer peers. In fact, the poor participants lost, on average, 13 I.Q. points.
In the Indian experiment, the same individuals were tracked before and after a financial milestone, further proving the ‘poverty-cognitive functioning’ hypothesis.
Indian sugar cane farmers receive a majority of their income for the year at one time— when their harvest comes in. However, this money often does not always last throughout the whole year. Thus, they experience relative poverty right before a harvest and relative plenty after a harvest.
The researchers gave the sugar cane farmers cognitive functioning tests that were similar to the ones the mall shoppers took both before and after the harvest. The results were similar: the farmers performed more slowly and with more errors when they were relatively poorer before the harvest than when they were more secure after the harvest. Their cognitive abilities were shown to be quite different depending on their financial security.
So what should we take away? Perhaps, if we want to help the poor do better, use services more effectively, or think more long-term, we need to design programs that are simple and not too time-consuming. This may help them maintain more bandwidth.
Photograph by Azhar feder via Wikimedia Commons, available here.
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