How scarcity shapes our lives
TheStar.com – opinion/commentary – Princeton psychologist proposes a new social science: the study of scarcity.
Sep 24 2013. By: Carol Goar
Scarcity is a word that used to belong to the realm of economics. It described the chronic inadequacy of goods and services to meet people’s needs – a fitting concept for what is often called the ‘dismal science.’
But lately scarcity has migrated into the field of psychology because it explains so much about misery, hardship, debilitating anxiety and wasted talent.
The catalyst for this merging of disciplines is a thought-provoking book just released by a Harvard economist and a Princeton psychologist. It is entitled Scarcity: Why Having Too Little Means So Much.
It is not an academic tome. It is written in plain language with examples drawn from current events, the frustrations of everyday life and the seemingly intractable woes of the world.
The Princeton psychologist outlined to an auditorium full of academics, policy-makers and non-profit leaders how scarcity – of food, income, time, sleep, security, friendship – impairs people’s judgment and locks them into patterns of behavior that compound their misery. And he showed how simple changes in the way they organize their lives can set them on a healthier path.
Shafir was not just theorizing. He and his co-author, Sendil Mullainathan, have set up a voluntary agency called ideas42 that “uses behavioural economics to do good.” Working with a team of 25 like-minded problem-solvers, they have developed procedures and routines to help people manage life’s demands.
But what Shafir came to Toronto to talk about was his research.
He began his fieldwork close to home. He went to a New Jersey mall and persuaded shoppers to take part in a quiz. First he asked them their approximate household income. Then he divided them into two groups: half were told to imagine an unexpected car problem had arisen that would cost $300 to fix. Both groups scored roughly the same on a standard IQ test.
Next he bumped the car bill up to $3,000. The higher-income subjects still did fine. The poor, preoccupied with payment options, did badly.
They weren’t stupider – but they looked less intelligent.
Next, he went farther afield, measuring the cognitive performances of sugar cane harvesters in India. After the harvest, when they were well-off, they generally performed well in tests mental acuity. He waited a year and administered the same tests to the same workers before the harvest when their money had run out. Their scores plummeted.
They weren’t stupider – but they looked slower-witted.
He did similar tests with hungry subjects, time-starved subjects and lonely subjects. A consistent pattern emerged. “When you don’t have a lot of something, you pay a lot of attention to that thing. It interferes with everything else you want to do.”
With just 12 minutes onstage, Shafir couldn’t elaborate on the policy implications of his research, but some are obvious:
- Blaming people for their poverty is wrong-headed. Chronic deprivation hijacks individuals’ brains, reducing their ability to make good choices, cope with their constraints and extricate themselves from their condition.
- Inundating people who need help with – forms to fill out, documents to gather, calculations to make and signatures to get – overwhelms them and reduces their ability to manage their lives.
- Exhorting people to say no – to purchases they cannot afford, loans they cannot repay, deadlines they cannot meet or commitments they cannot keep – doesn’t work. They need structures in their lives to prevent them from falling into to temptation and buffers to limit the harm when they do.
Shafir made it clear that he and Mullainathan are as guilty as anyone of mismanaging their time, neglecting important priorities and depleting their mental resources.
But they know when they’re doing and why millions of other rational people fall into the same trap. “Our attention is limited. What we fail to appreciate is the extent to which it is limited.”
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