Poor people make bad decisions

 By DEREK THOMPSON,  NOV 22, 2013 www.theatlantic.com/

In August, Science published a landmark study concluding that poverty, itself, hurts our ability to make decisions about school, finances and life, 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" for bad decisions and a rebuke to policies that withhold money from the poorest families unless they behave in a certain way. After all, if being poor leads to bad decision-making (as opposed to the other way around), then giving cash should alleviate 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 comment published on Gawker's Kinja platform by a person in poverty, is a devastating illustration of the Science study.

I make a lot of poor financial decisions. None of them matter in the long term. I will never not be poor, so what does it matter if I don’t pay a thing and a half this week instead of just one thing? It's not like the sacrifice will result in improved circumstances; the thing holding me back isn't that I blow five bucks at Wendy's. It's that now that I have proven that I am a poor person that is all that I am or ever will be. It is not worth it to me to live a bleak life devoid of small pleasures so 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 no matter how responsible you are you will be broke in three days anyway. When you never have enough 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 different baby daddies instead of one. You grab a bit of connection wherever you can to survive. You have no idea how strong the pull to feel worthwhile is. It’s more basic than food. You go to these people who make you feel lovely for an hour that one time, and that's all you get. You're probably not compatible with them for anything long-term, but right this minute they can make you feel powerful and valuable. It does not matter what will happen in a month. Whatever happens in a month 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 found that virtues like patience and self-control weren't as simple previous studies suggested. In the ubiquitous Marshmallow study, for example, kids who ate the treat quickly were deemed impatient and kids that waited had self-control and, on the whole, went on to lead more productive lives, the study found.

But rational self-control in the real world, Kable says, isn't so black-and-white. Perhaps you have enough patience to wait an hour for a train, or to lose one pound each week with exercise and dieting. That sounds responsible. But what happens if the train isn't there in 90 minutes? If you never lose weight and you're making yourself 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 frame that wasn’t properly framed to begin with," Maria Konnikova summed it up for The Times.

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

None of this is an argument against poorer families trying to save or plan for the long-term. It's an argument for context. As Eldar Shafir, the author of the Science study, told The Atlantic Cities' Emily Badger: "All the data shows it isn't about poor people, it's about people who happen to be in poverty. All the data suggests it is not the person, it's the context they’re inhabiting."


Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labour markets and the entertainment business.