POVERTY IMPEDES COGNITIVE FUNCTION
A NA N D I M A N I , S E N D H I L M U L L A I NAT H AN, E L DA R S H A F I R , J I AY I N G Z H AO
Presented by:
Amy Ostrander
Project Concern International
May 3, 2016
SOURCES
• Poverty Impedes Cognitive Function
Anandi Mani, Sendhil Mullainathan, Eldar Shafir, Jiaying Zhao. Science 341, 976. August 2013.
• Scarcity:
Why Having Too Little Means So Much
Mulainathan, Sendhil & Shafir, Eldar. Henry Holt. 2013.
POVERTY & BEHAVIOR
• Studies repeatedly show that poverty is correlated with
counterproductive behavior that can in fact deepen poverty
• The standard explanations are:
• Environmental factors (Predatory lenders, poor transportation)
• Characteristics of the poor themselves (low education, learned behavior across
generations)
• Scarcity theory proposes that:
“Poverty itself reduces mental capacity”
SCARCITY PRIMER
SCARCITY
• When we have a shortage of something we tend to pay
closer attention
• This why deadlines are so effective
• They create a time scarcity that helps you focus your mind
• On a tight deadline we are less distracted and work harder
or more efficiently
• This is because scarcity captures the mind, allowing you to
shut out other concerns
FOCUS & TUNNELING
• The capture of the mind can be a positive or a negative
• Focusing is a positive
• The “focus dividend” – you’re less distracted and more effective
• But focusing on something means that we are ignoring or
neglecting other things
• Tunneling is the negative side (think tunnel vision)
• So focused on a deadline that you forgot to pick your kid up from school
LESS BANDWIDTH
• Focus on scarcity is involuntary
• It fills our mind and results in less bandwidth for everything else
• Bandwidth – what our brain can do. It’s our “computational
capacity, ability to pay attention, to make good decisions, to stick
to our plans, and to resist temptations.”
SCARCITY IN ACTION
• How can we tell when this is happening? How do we test it?
• Measure two things:
• Cognitive capacity
• Executive control
RAVEN’S MATRICES
RAVEN’S MATRICES
COGNITIVE CAPACITY
• Fluid intelligence – the capacity to think logically, analyze, and
solve problems
• Tests of fluid intelligence are common on IQ tests
• Measured using Raven’s Matrices tests
• Tests that don’t require any previous knowledge, language
ability, or formal education
EXECUTIVE CONTROL
Press the SAME side
as the heart
Press the OPPOSITE
side of the sun
EXECUTIVE CONTROL
• Executive control is used to direct attention, initiate action,
inhibit intuitive responses, and resist impulses
• (Think of the marshmallow study - to see if kids could resist eating one
marshmallow in order to get two a while later. Those who resisted showed
more executive control.)
• Tested using tasks that require people to respond quickly and
often contrary to their first impulse
• (Say the color the word is written in: BLUE)
SCARCITY CAPTURES THE MIND
• These two types of tests were used in experiments to measure
scarcity’s effect on participants
• May seem strange to measure intelligence and control
repeatedly on the same person
• We’re used to thinking about them more or less as fixed
quantities, at the very least slow to change
• This is the point – scarcity captures the mind
• If that is true, then these results can change with different
circumstances
SCARCITY & POVERTY
• Now that we know the background – let’s look at one
particular form of scarcity – poverty
For these studies • Poverty is broadly defined – the gap between one’s needs and
the resources available to fill them
LIFE IN POVERTY
• The “poor manage sporadic income, juggle expenses, and
make difficult trade-offs”
• These financial concerns are constant and are frequently called
to mind - pulling at their attention
• Furthermore, as a result of limited resources, the poor have a
smaller margin of error
• There’s no cushion when they make a “mistake”
• Mistakes are more noticeable or have a bigger impact
Poverty Impedes Cognitive Function
Anandi Mani, Sendhil Mullainathan, Eldar Shafir, Jiaying Zhao. Science 341, 976. August
2013.
• Highlights two studies testing the effects of poverty on
cognitive function
• Study #1 – lab study – United States - evoke thoughts of
financial strain for rich and poor participants
• Study #2 – field study – India – tested sugarcane farmers at
different stages – poor pre-harvest and richer post-harvest
STUDY #1
NEW JERSEY MALL
NEW JERSEY MALL STUDY
• Four experiments - paid participants in a New Jersey mall
• Median HH income of $70,000, lower bound of $20,000
• Use financial scenarios with the intent to trigger thoughts of the
participant’s own active financial concerns
NEW JERSEY MALL STUDY
• Example scenario:
“Your car is having some trouble and requires $X to be
fixed. You can pay in full, take a loan, or take a chance
and forego the service at the moment. How would you go
about making the decision?”
NEW JERSEY MALL STUDY
• “Easy”, $150 repair –
• Should not cause concern for either rich or poor
• “Hard” $1500 repair –
• Is likely to cause concern in the poor but not the rich
• After (or while) considering how they would solve the financial
scenario they performed two computer-based tasks
• Measured cognitive capacity and executive control
RESULTS
• “Easy” condition –
• Poor and rich perform similarly on both tests
RESULTS
• “Hard” condition – evoking financial concerns
• Poor participants perform significantly worse than the rich
RESULTS
• These results were remarkably consistent throughout three
additional variations of the experiment in order to rule out
possible influencing factors
Experiment 3
Experiment 4
STUDY #2
INDIAN SUGARCANE
FARMERS
SUGARCANE FARMER STUDY
• 464 sugarcane farmers in 54 villages in Tamil Nadu, India
• Small farmers - earn at least 60% of income from sugarcane
• Pre-harvest they had more loans, pawned more items, and
reported more often that they had struggled with bills
• Harvests dates are staggered over 3-5 month period (due to
sugar mills with processing constraints)
• The same month can be pre-harvest for one farmer and postharvest for another (controlling for calendar effects)
SUGARCANE FARMER STUDY
• Each participant was interviewed twice – before and after
harvest
• So we’re looking at change in one person
• To control for training effects (doing better simply because it’s the second
time taking the test) – they held 100 farmers out of the initial set and they
were only tested post-harvest.
• They performed similarly to the sample set, indicating no training effects
RESULTS
• Pre-harvest the farmers were less accurate on the Raven’s
matrices
• They also took more time to respond to the questions
requiring cognitive control and made more errors
SO WHAT?
ANALYSIS
• Compared these results to studies from sleep research
• Evoking financial concerns has the same cognitive impact as
losing a full night of sleep
• The difference in scoring on standard IQ tests is about 13 IQ
points, nearly one full standard deviation
• The difference between “superior” to “average” intelligence, or
from “average” to “borderline deficient.”
POVERTY
• The “poor manage sporadic income, juggle expenses, and
make difficult trade-offs”
• These financial concerns are constant and are frequently called
to mind - pulling at their attention
• Furthermore, as a result of limited resources, the poor have a
smaller margin of error
• There’s no cushion when they make a “mistake”
• Mistakes are more noticeable or have a bigger impact
ANALYSIS
• “Taken together, the two sets of studies (…) illustrate how
financial conditions, which are endemic to poverty, can result in
diminished cognitive capacity”
• “Suggest(s) a different perspective on poverty.”
• Poor contend not only with challenges of insufficient money but
also with a shortfall of cognitive resources
ANALYSIS
• The poor, in this view, are less capable not because of inherent
limitations, but because the very context of poverty imposes a
load and impedes their cognitive capacity
• “The findings, in other words, are not about poor people,
but about people who find themselves poor.”
IMPLICATIONS FOR OUR WORK
IMPLICATIONS FOR OUR WORK
• Facilitate a better understanding of the actions taken by
those in poverty
• Ask better questions about behavior and decisions
• Recognize that some decisions are not consciously made, they’re just
outside the “tunnel”
• Think about the mental perspective of program beneficiaries
• Ask them – what are your major concerns?
• Identify what is already in a beneficiary’s “tunnel” for better
targeting and outcomes
• They’re likely to be interested already
• When it’s not in their “tunnel” – what is our approach?
IMPLICATIONS FOR OUR WORK
• Be aware of how interventions tax bandwidth – and then
make choices and trade-offs
• Be smart about when and how you impose a cognitive tax
• Training programs ask for time and focus
• Can participants focus and learn? How can we help that?
• How can we streamline so it take less bandwidth?
• If they focus on training what might they be letting slip?
• Is that more important?
• If they can’t focus and learn then we’ve all wasted time
IMPLICATIONS FOR OUR WORK
• Beware of imposing strong cognitive taxes on the poor
• Long forms, understanding new or complex rules, responding to
complex incentives
• Think about where these taxes can be reduced or eliminated
• Instead focus on:
• Smart defaults
• Help filling out forms (or shorter forms, or no forms!)
• Planning reminders or prompts
IMPLICATIONS FOR OUR WORK
 Recognize and respond to natural variation in cognitive
capacity
 Consider the timing of interventions for farmers
 In fertilizer studies farmers made higher-return investment
decisions when done just after harvest as compared to later in
the season
QUESTIONS &
DISCUSSION
THANK YOU
OTHER POTENTIAL CAUSES
• Stress could be one explanation – did a 2009 study monitoring
stress markers like heart rate and controlled for stress levels.
• Pre-harvest farmers do experience stress, however, the findings for
scarcity remain significant
• Another study controlled for nutrition by factoring in spending
on food
• Attention capture is the most compelling explanation
• It is consistent with observations in other domains of scarcity – such as
insufficient time