How Poverty Impairs Mental Functioning And Promotes Risky Decision-Making

Published on October 12th, 2013 | by

October 12th, 2013 by

It's a hard life

Researchers who study poverty have long-recognized that those who live in poverty frequently behave in less capable ways and engage in risky behaviors that both produce additional problems and also exacerbate their poverty status.

Previous research on people living in long-term poverty (Shah et al, 2012, others) have shown fairly conclusively that lack of financial means forces poor decision-making — such as choosing to purchase cheaper, less healthy foods, or, to forgo purchasing a necessary medication due to cost, thus increasing poor health. This much seems clear, if not self-evident.

But new research by a team of psychologists and economists from Harvard, Princeton, and the University of British Columbia, has found that it is not simply the lack of money that forces  poor people to make “poor” decisions, rather, that poverty itself depletes cognitive resources, and specifically, one resource in particular: cognitive control.

According to the researchers — who combined results from two complimentary studies — poverty “directly impedes cognitive functioning”.

Self-Control – A Limited Resource

The new findings by Mani et al buttress what’s known as the limited resource model of self control according to which being poor depletes a person’s ability to control future decisions and actions because of the constant “trade-offs” and self-control demands that poverty imposes on the individual.

Previous research (Pocheptsova et al, 2009, Wang et al, 2010) indicates that decision-making that demands self-control (e.g., resisting desires) leads to future decisions that favor impulsive, “intuitive”, choices over more reasoned ones. And, the effect is cumulative.

Poor people, due to their lack of financial resources, tend to face more of such trade-offs, more frequently, with each such trade-off or sacrifice further depleting his or her capacity for self-control. Put simply: the more people have to exercise self-control, the worse they become at exercising self-control. Interestingly, this behavior is similar to those experiencing chronic pain (Solberg Nes et al, 2010).

“Being Poor means coping not just with a shortfall of money, but also with a concurrent shortfall of cognitive resources.” (Mani et al, Science, 30 August, 2013)

The typical result of this nearly continuous overtaxing of self-control is that poor people, who unavoidably must overcome urges that affluent people indulge routinely, are more likely to overspend, over-eat, and engage in other risky behaviors.

Most of us readily recognize that money is a limited resource (for the majority of us), but we tend not to view self-control as a limited resource. We tend to see self-control as a “character”, or even moral, trait, more or less; certain social biases can lead us to reflexively blame the poor for their own “bad”choices and inability to constrain their risky behaviors.

This newest research readdresses this notion by placing the issue of poverty and behavior in the context of cognitive capacity and investigates whether the state of poverty itself impairs cognitive performance by over-taxing this capacity.

The Experiments – Finances and Farmers

Mani and colleagues endeavored to test this cognitive constraint hypothesis by designing two separate but mutually supporting studies: one being a laboratory study, and the other, a “field” study.

In the first, they “induced thoughts about finances” in the study subjects. The subject pool (shoppers at a New Jersey mall) was selected to be representative of the American socio-economic spectrum — ranging in annual income from 20,000.00 dollars per year to over 70,000.00 per year*. Participants were presented with hypothetical problems (e.g., their car is  in need of serious repairs, costing x $) and then asked how each would go about deciding what to do (having first been presented with the choices: pay in full, take out a loan, or forgo the repairs). Subjects were randomly assigned scenarios with either a “hard” condition  (more costly) or “easy” condition (less costly). These scenarios and choices were designed to trigger thoughts (“concerns”) about the subject’s own personal finances.

This scenario phase of the study was immediately followed by two types of cognition tests: a spatial compatibility test which tests “cognitive control” (the ability to guide thoughts and actions in keeping with internal goals, thus “self-control”) as a function of speed and accuracy in response to opposing stimuli. The second cognitive test administered was what’s known as Raven’s Progressive Matrices, which is a standard component of IQ tests used to measure “fluid intelligence” (which tests one’s ability to think in novel situations regardless of acquired knowledge).

Results showed that in the “easy” condition (e.g., where car repair would cost only 150.00), high and low income earners (“rich and poor”) performed similarly on both tests. However, in the “hard” condition  (with repairs costing 1500.00), those who were poor performed significantly worse on both the Raven’s and cognitive control tests. Overall, the poor performed “reliably worse” than the rich (note: the researchers conducted 4 such lab experiments, with subsequent ones designed to eliminate “math anxiety” and reduce cognitive test “load” on the subjects, with similar results).

In all four constituent experiments, the team noted a “robust interaction between income and condition.”

In the second study (the “field” study), the research team examined the cognitive functioning of farmers over the course of a planting/harvesting cycle. The study subjects here were 464 small-scale, sugarcane farmers from 54 villages in two districts of Tamil Nadu, India. Farmers had to make at least 60% of their income from sugarcane farming. They were interviewed twice over a four month period — before and after harvest.

Nagercoil rice paddy fields - Tamil Nadu - India  The data confirmed that the farmers “faced greater  financial pressure pre- as compared to post harvest”. Specifically, they pawned items more frequently and took out almost twice as many loans pre-harvest time as during post harvest time. The farmers were also more likely to answer “yes” to the question: “Did you have trouble coping with ordinary bills in the last fifteen days?” pre-harvest than they did post harvest (left image: rice paddies, Tamil Nadu, India)

In the cognitive testing phase, the researchers substituted the spatial compatibility test with a numeric version of the conventional Stroop task test (deemed appropriate for low literacy populations) which quantifies both speed and accuracy. On both the Stroop and Raven’s tests, the farmers performed better post-harvest than pre-harvest, with the average number of errors being lower post-harvest. Additionally, regression analyses confirmed pre/post harvest differences on both tests, and, the farmers’ “perceived intensity” of how financially constrained they are (based on the “last 15 days” question) was negatively correlated with their performance on the two cognitive tests. In other words, the less financially constrained they perceived themselves to be, the better they did on the cognition tests.

This second study was controlled for “calendar effects”, i.e., differences in planting and harvesting due to festivals or weather, which can create false correlations, as well as nutritional/food consumption factors, pre- and post harvest (caloric intake by the farmers was actually slightly less post harvest).

Further, the researchers considered the role of  physiological “stress” in their findings — controlling for three stress measures (heart rate, diastolic and systolic blood pressure) — but found that this biological definition of stress (based on these three biomarkers) was insufficient to explain the low cognitive performance found. Rather, the researchers found that “attentional capture” was the best explanation for the observed mechanism. In this theory, it is held that poverty captures attention while simultaneously triggering intrusive thoughts and reducing cognitive resources.

In light of their findings, the researchers suggest that future educational and agricultural service programs in these regions be carefully timed to the appropriate phase of the harvest cycle, when there is greater cognitive capacity post harvest (note: research by Doflo et al, 2011, show that farmers made higher-return investments immediately following harvest time, compared to later in the season).

In seeking to demonstrate a “causal relationship between actual income and cognitive function in situ“, the  researchers assess their two studies thus:

“The laboratory study has a great deal of internal validity and illustrates our proposed mechanism, whereas the field study boosts the external validity of the laboratory study.”

What is Poverty? – Impacts and Provocative Conclusions

In seeking to show how money concerns “tax the cognitive system”, Mani et al define poverty as “the gap between one’s needs and the resource necessary to fulfill them.” While acknowledging that such needs can be subjective, the team notes that their dual studies encompass low-income people in both the developed and developing worlds, and further encompasses people experiencing “transitory income shocks” such as from unemployment or medical emergencies.

Additionally, past research data points to a cumulative, long-term effect of poverty on cognition (Karelis, 2007, Shonkoff, Deborah, 2000) while childhood poverty has been correlated with hindered brain development and a reduction in cognitive capacity amongst adults who experienced childhood poverty (Evans et al, 2009).

This recent research by Mani et al demonstrates a mechanism of cognitive impairment not derived from childhood poverty, but rather, from “an immediate cognitive load caused by financial concerns.” In their August 2013 Science paper, the researchers assert that “evoking financial concerns has an impact comparable with losing a full night’s sleep” and further assert that “the effects we observed correspond to − 13 IQ points.”

In the words of the authors:

“The findings are not about poor people…but about any people who find themselves poor.”

The full elucidation and long-term impact of this “cognitive mechanism” awaits future study, but the implications of this new research by Mani et al  for individuals and societies — and social policy — would seem to be significant and far-reaching.

* It is interesting that Mani et al chose this annual income figure of 70 K to represent the “rich’ or high income group, as it is quite close to the income estimate by Kahneman and Deaton (2010) for the cut-off point for improvement in emotional well-being and “life-evaluation” ratings. See my earlier post:  Money Does “Buy” Happiness, Up To A Point

Source material for this article came from the paper ‘Poverty Impedes Cognitive Function’ (Science, 30 August, 2013); authors: Anandi Mani, Sendhil Mullainathan, Eldar Shafir, and Jiaying Zhao

Additional material came from the Science ‘Perspective’ article (same edition) ‘The Poor’s Poor Mental Power’ by Kathleen D. Vohs

Author’s Note (added Dec. 24, 2013): As to the question of what might help restore a person’s cognitive resources, recent research on the “power of prayer” by Friese and Wanke (published in the Journal of Experimental Social Psychology) showed that those who prayed before being given an emotional suppressive task followed by the Stroop test performed better on the test than those who were told to just think about any subject they chose. Follow up analysis showed that people who prayed interpreted the act of praying as a social interaction with god, and it is social interaction, the researchers posit, that gives us the “cognitive resources to avoid temptation.” This result held for the religious and non-religious alike. Previous research (Ybarra, Burnstein, Winkielman {2008}) supports this theoretical interpretation; even brief social interactions improve cognitive functioning.

Top photo: (“It’s a Hard Life’); credit: wrangler via

Bottom Photo (Rice paddies): Lush green paddy fields between Aralvaimozhy and Nagercoil, Tamil Nadu, India (credit: w:user:PlaneMad /CC-By-SA 3.0)


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