What’s the Latest Development?
Psychological researchers at Princeton University recently gathered more evidence in favor of the theory that poverty is a cycle, rather than a simple consequence of irresponsible behavior. By looking at sugar-cane farmers in India, who are extremely cash poor before their harvest, then suddenly cash rich afterwards, researchers were better able to understand how having money affects the decision-making process. “The farmers scored significantly lower on the [intelligence] tests before the harvest, when money was tight, suggesting that their worries made it harder to think clearly.”
What’s the Big Idea?
The overriding question of the study, and one which continually affects social welfare programs created by the government to benefit the poor, is whether bad decision-making helps cause poverty, or does poverty interfere with decision-making? According to the Princeton researchers, “the most likely explanation for the results is that people have a limited amount of ‘mental bandwidth’, and financial worries leave less available for other cognitive tasks,” such as creating a nurturing environment for children. If so, then poor people’s bad decision-making may be at least partly a result of their circumstances, not due to any intrinsic lack of intelligence.
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