How “Decision Fatigue” Can Exacerbate Poverty

How “Decision Fatigue” Can Exacerbate Poverty

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By Rebecca Schectman, policy intern at ONE

Have you noticed that supermarket check-out aisles can seem like you’re running a gauntlet of candy bars, gum and gossip magazines? One reason for this is that marketers know that after making lots of decisions while filling your cart, you’re probably worn down and are more likely to grab an “impulse buy” like that sugary snack you weren’t planning on purchasing. Lucky for you, this additional treat probably won’t break your bank account. But if you’re one of the billion people around the world living on less than $1.25 a day, the “decision fatigue” that sets in after making so many daily tradeoffs can have measurable effects on decision-making capacity and self-control.

Mawango/Kapiri Lea School

Research has shown that we all have cognitive “bandwidth” that can be diminished by making lots of decisions, especially if you’re under extreme financial stress. While you may occasionally leave the store with something you hadn’t intended to buy, at least you probably didn’t have to worry too much about the couple bucks you dropped on chocolate or bubble gum.

However, people living in poverty face countless daily decisions with much more at risk. In a study titled “Poverty Impedes Cognitive Function,” individuals under financial strain performed more poorly on cognitive tests. Poor people have to make higher-stakes decisions, resulting in decision fatigue that saps cognitive resources they have available to devote to other things. Being under constant financial stress is mentally, emotionally, and oftentimes physically draining— this makes people more susceptible to making suboptimal decisions and decreases the time and energy available for doing things that could boost them out of poverty. Research suggests that the effects of the cognitive burden of poverty are comparable to a decrease of 13 IQ points. That’s equivalent to losing a night’s sleep or the difference between chronic alcoholics and healthy adults.

This study, published in the journal Science, has implications both for domestic and international poverty. For their experiment, the authors used subjects from a mall in New Jersey and farmers in Tamil Nadu, India. They found that low-income Americans performed worse on cognitive tests after contemplating expensive car repairs than high-income individuals. Similarly, Indian sugarcane farmers performed worse on cognitive tests before the harvest than after the harvest, when they have more income and financial security. In another study, Princeton economist Dean Spears found that making even small economic choices depletes the willpower of people in poorer villages more so than people in better-off villages in northwestern India. Additionally, the world’s poorest must deal with the other negative health impacts of poverty, such as nutritional deficits and old-fashioned stress that impair their ability to perform day-to-day cognitive tasks.

Studies like these undermine the notion that irresponsible behavior leads to poverty. Instead, research suggests that the daily stresses associated with living in poverty can lead to bad decision making, and thus perpetuate bad outcomes. It creates a vicious cycle. Findings such as these emphasize the importance of meeting the global commitment to ending extreme poverty by 2030.

In the words of Vox editor and journalist Matthew Yglesias, “At home or abroad, the strain of constantly worrying about money is a substantial barrier to the smart decision-making that people in tough circumstances need to succeed. One of the best ways to help the poor help themselves, in other words, is to simply make them less poor.”

We agree.

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