The New Republic:
Purchasing decisions that the wealthy can base entirely on preference, like buying dinner, require rigorous tradeoff calculations for the poor. As Princeton psychologist Eldar Shafir formulated the point in a recent talk, for the poor, “almost everything they do requires tradeoff thinking. It’s distracting, it’s depleting … and it leads to error.” The poor have to make financial tradeoff decisions, as Shafir put it, “on anything above a muffin.”
Haaretz:
Most of us judge poor people, viewing them at worst as lazy, at best as suffering from deficient financial behavior. We've gotten used to thinking that being poor is their fault: If they were smarter or more industrious they surely would have overcome their poverty.
Shafir, however, claims that the real culprit isn't lack of ability but problems created by poverty.
Artikkeleissa mainitaan kolme koetta. Ensimmäisessä kokeessa Case Western Reserven yliopiston tutkijat Roy Baumeister, Ellen Bratslavsky, Mark Muraven ja Dianne Tice tarjosivat osallistujille ensin sekä retiisejä että keksejä ja suklaata. Joitakin osallistujia kehoitettiin sen jälkeen olemaan syömättä herkkuja ja syömään retiisit sen sijaan. Tämän jälkeen osallistujien tuli koittaa ratkaista mahdottomia geometrisiä tehtäviä. Ne osallistujat, jotka olivat aiemmin joutuneet vastustamaan kiusausta syödä herkut, luovuttivat kaksi kertaa nopeammin kuin muut. Kiusauksen vastustaminen oli psykologisesti kuormittavaa, mikä heijastui myöhempään toimintakykyyn.
Toisessa kokeessa professorit Eldar Shafir ja Jiaying Zhao Princetonin yliopistosta ja professori Sendhil Mullainathan Harvardin yliopistosta käskivät osallistujia pohtimaan auton korjaamista, joko 150 tai 1500 dollarin hintaan. Samalla kuin osallistujat koittivat tehdä päätöstä heille annettiin ratkaistavaksi pieniä älyllisiä harjoituksia ja pulmia. Yli keskitason tienaavat suoriutuivat molemmista tehtävistä hyvin. Keskituloiset tai matalapalkkaiset taas suoriutuivat sitä huonommin, mitä korkeammaksi auton korjauskustannukset kohosivat. Jo pelkkä ajatus siitä, että joutuisi käyttämään rahaa auton korjaamiseen vaikutti heidän kykyynsä ajatella rationaalisesti.
Kolmannessa kokeessa Shafir ja Mullainathan tutkivat Intialaisten viljelijöiden älykkyysosamäärää sekä ennen että jälkeen sadonkorjuun. Viljelijöiden saamat tulokset olivat korkeammat sadonkorjuun jälkeen kuin ennen sitä. Sadonkorjuun jälkeen viljelijöiden taloudellinen tilanne on suhteellisen hyvä, kun taas ennen sadonkorjuuta heidän tilanteensa on kaikkein niukin. Tiukan taloudellisen tilanteen aiheuttama stressi vaikutti selvästi heidän ajatteluunsa ja päätöksentekokykyynsä.
Tutkijoiden johtopäätöksenä oli, että köyhyys vaikuttaa ihmiseen perustavanlaatuisella psykologisella tasolla.
"You're so concerned about the present that you can't begin thinking about the future, and that's the big irony: People with the greatest need to think about the future don't have the leisure or emotional capacity to do so. The very essence of poverty complicates decisions and makes immediate needs so urgent that you start making wrong choices."
Lue myös:
Tutkimus: Köyhyys saattaa ehkäistä muistin ja oppimiskyvyn kehittymistä
Tutkimus: Köyhyys voi tukahduttaa lapsen geneettisen potentiaalin
Taloussanomat: Syrjäytyminen alkaa jo lapsena
The New Republic 06.06.2011
Why Can’t More Poor People Escape Poverty?
A radical new explanation from psychologists.
Flannery O’Connor once described the contradictory desires that afflict all of us with characteristic simplicity. “Free will does not mean one will,” she wrote, “but many wills conflicting in one man.” The existence of appealing alternatives, after all, is what makes free will free: What would choice be without inner debate? We’re torn between staying faithful and that alluring man or woman across the room. We can’t resist the red velvet cake despite having sworn to keep our calories down. We buy a leather jacket on impulse, even though we know we’ll need the money for other things. Everyone is aware of such inner conflicts. But how, exactly, do we choose among them? As it turns out, science has recently shed light on the way our minds reconcile these conflicts, and the result has surprising implications for the way we think about one of society’s most intractable problems: poverty.
In the 1990s, social psychologists developed a theory of “depletable” self-control. The idea was that an individual’s capacity for exerting willpower was finite—that exerting willpower in one area makes us less able to exert it in other areas. In 1998, researchers at Case Western Reserve University published some of the young movement’s first returns. Roy Baumeister, Ellen Bratslavsky, Mark Muraven, and Dianne Tice set up a simple experiment. They had food-deprived subjects sit at a table with two types of food on it: cookies and chocolates; and radishes. Some of the subjects were instructed to eat radishes and resist the sweets, and afterwards all were put to work on unsolvable geometric puzzles. Resisting the sweets, independent of mood, made participants give up more than twice as quickly on the geometric puzzles. Resisting temptation, the researchers found, seemed to have “produced a ‘psychic cost.’”
Over the intervening 13 years, these results have been corroborated in more than 100 experiments. Researchers have found that exerting self-control on an initial task impaired self-control on subsequent tasks: Consumers became more susceptible to tempting products; chronic dieters overate; people were more likely to lie for monetary gain; and so on. As Baumeister told Teaching of Psychology in 2008, “After you exert self-control in any sphere at all, like resisting dessert, you have less self-control at the next task.”
In addition, researchers have expanded the theory to cover tradeoff decisions, not just self-control decisions. That is, any decision that requires tradeoffs seems to deplete our ability to muster willpower for future decisions. Tradeoff decisions, like choosing between more money and more leisure time, require the same conflict resolution as self-control decisions (although our impulses appear to play a smaller role). In both cases, willpower can be understood as the capacity to resolve conflicts among choices as rationally as possible, and to make the best decision in light of one’s personal goals. And, in both cases, willpower seems to be a depletable resource.
This theory of depletable willpower has its detractors, and, as in most academic topics studied across disciplinary fields, one finds plenty of disputes over the details. But this model of self-control is now one of the most prominent theories of willpower in social psychology, at the core of what E. Tory Higgins of Columbia University described in 2009 as “an explosion of scientific interest” in the topic over the last decade. Some skeptics correctly emphasize the vital role of motivation, and some emphasize instead that “attention” is limited. But the core of the breakthrough is that resolving conflicts among choices is expensive at a cognitive level and can be unpleasant. It causes mental fatigue.
Nowhere is this revelation more important than in our efforts to understand poverty. Taking this model of willpower into the real world, psychologists and economists have been exploring one particular source of stress on the mind: finances. The level at which the poor have to exert financial self-control, they have suggested, is far lower than the level at which the well-off have to do so. Purchasing decisions that the wealthy can base entirely on preference, like buying dinner, require rigorous tradeoff calculations for the poor. As Princeton psychologist Eldar Shafir formulated the point in a recent talk, for the poor, “almost everything they do requires tradeoff thinking. It’s distracting, it’s depleting … and it leads to error.” The poor have to make financial tradeoff decisions, as Shafir put it, “on anything above a muffin.”
Last December, Princeton economist Dean Spears published a series of experiments that each revealed how “poverty appears to have made economic decision-making more consuming of cognitive control for poorer people than for richer people.” In one experiment, poor participants in India performed far less well on a self-control task after simply having to first decide whether to purchase body soap. As Spears found, “Choosing first was depleting only for the poorer participants.” Again, if you have enough money, deciding whether to buy the soap only requires considering whether you want it, not what you might have to give up to get it. Many of the tradeoff decisions that the poor have to make every day are onerous and depressing: whether to pay rent or buy food; to buy medicine or winter clothes; to pay for school materials or loan money to a relative. These choices are weighty, and just thinking about them seems to exact a mental cost.
In a paper in April 2010, Harvard behavioral economist Sendhil Mullainathan (for whom, full disclosure, I once worked) and MIT’s Abhijit Banerjee applied this same notion to decisions requiring self-control. If a doughnut costs twenty-five cents, they wrote, then that “$0.25 will be far more costly to someone living on $2 a day than to someone living on $30 a day. In other words, the same self-control problem is more consequential for the poor.” And so, in addition to all the structural barriers that prevent even determined poor people from escaping poverty, there may be another, deeper, and considerably more disturbing barrier: Poverty may reduce free will, making it even harder for the poor to escape their circumstances.
All of this suggests that we need to rethink our approaches to poverty reduction. Many of our current anti-poverty efforts focus on access to health, educational, agricultural, and financial services. Now, it seems, we need to start treating willpower as a scarce and important resource as well.
Some promising approaches have already been tried. Starting in 2002, economists Nava Ashraf, Dean Karlan, and Wesley Yin created and analyzed a unique type of savings account at a small rural bank on the island of Mindanao in the Philippines. The Green Bank of Caraga’s SEED accounts (Save, Earn, Enjoy Deposits) let clients place restrictions on when they could access their money. SEED clients could set either a date before which or a minimum savings amount below which they couldn’t access their own funds. Twenty-eight percent of existing bank clients who were offered the accounts enrolled in them, and, after one year, the economists found, customers saved over 300 percent more with SEED accounts than they would have without them. The accounts offered an opportunity to circumvent self-control failure, in the same way Ulysses bound himself to the mast to resist the Sirens’ call.
The developed world offers numerous such “commitment products”: certificates of deposit, pension plans, government savings bonds, and education savings accounts, to name a few. But, in the developing world, institutional supports for flagging willpower are far fewer. To make use of these new discoveries, similar products that explicitly attempt to reduce willpower costs could be developed in numerous fields, from health to education to agriculture to financial management.
This brings up a second, similar point: Comfort goods like washing machines and dishwashers free up valuable time and attention. Think of all the things the wealthy do to spend more time focusing on what’s important. They can pay bills automatically, they can hire babysitters and have food delivered, they can have their homes and clothes cleaned for them. But, in the developing world, cost-effective time savers have come much more slowly to those who most need them. Five-dollar, energy-efficient stoves can cut firewood usage, improving children’s health and halving the amount of time it takes to gather enough firewood to cook. Small solar panels systems, too, as The New York Times recently reported, can play “an epic, transformative role” in homes off the electrical grid, saving families time and money on kerosene. Broadly distributed, such simple innovations would allow the poor to avoid difficult tradeoff decisions about how they spend their time or even their money.
Third, money itself can go a long way toward altering the dynamic that leads to willpower depletion among the poor. Government transfers of money have proven successful in Mexico and Brazil, for instance. In particular, attaching conditions to these transfers—such as requiring school attendance, regular clinic visits, and savings behavior—may allow for an end-run around the kind of willpower-based poverty traps that too frequently seem to end with the poor making unwise decisions.
Finally, what about the possibility of strengthening the willpower “muscle”? Here, the research is complicated. While one line of research has found reason to think that drained willpower can be restored in the short term—by taking a walk in nature or watching a humorous video, for instance—studies on how to strengthen the willpower muscle in the long term are far less conclusive. This second line of research seems to be more promising in children than in adults. As Kathleen Vohs of the University of Minnesota, who has done extensive research on willpower, put it, “There might be something of a developmental sweet spot.” In twelve U.S. states, a program called Tools of the Mind is explicitly aimed at improving willpower functions in prekindergarten and kindergarten children. While some of the strategies would be quite difficult in much of the developing world, many are not, or could be adapted.
Of course, to argue that stressful decisions can exhaust precious mental resources is not to suggest that the decisions of the poor can’t be attributed to human agency. Still, while free will is real, it is also subject to complications. The economist Amartya Sen, in his well-known volume Development as Freedom, notes how an individual’s “freedom of agency” is “constrained by the social, political and economic opportunities” available to them. He’s right: Fewer options do reduce freedom. But now, we may need to grapple with a new possibility: that poverty doesn’t simply reduce freedom by constraining an individual’s choices, but that it may actually alter the nature of freedom by reducing an individual’s willpower.
Haaretz 23.02.2012
T
he psychological poverty trap
The poor aren't less able, they're distracted, says poverty expert Eldar Shafir. Privileged people subjected to the same conditions would also make bad decisions.
In a behavioral economics experiment several years ago, researchers asked shoppers at a New Jersey mall to handle the following decision: Have your faulty car repaired for either $150 or $1,500. While the participants were considering how to decide, they were given simple cognitive tasks like solving puzzles.
The researchers, Prof. Eldar Shafir and Jiaying Zhao, both from Princeton University, and Harvard University Prof. Sendhil Mullainathan, expected that the stress from contemplating the $1,500 expense would hurt performance. They were right. But participants with above-average incomes succeeded in their tasks under both scenarios, while those with average or low incomes did worse as repair costs climbed. Even the prospect of spending any money at all damaged the ability of low-income earners to think rationally.
Similar tendencies were found on the other side of the world. Shafir and Mullainathan tested the intelligence of sugarcane growers in India during two different periods: after selling the harvest, when they enjoy relative prosperity, and before the harvest, when times are tightest. The farmers had better IQ results during the season of plenty. Before the harvest they had problems making fateful decisions, because of stress. The study concluded that poverty generates a psychology of its own.
Most of us judge poor people, viewing them at worst as lazy, at best as suffering from deficient financial behavior. We've gotten used to thinking that being poor is their fault: If they were smarter or more industrious they surely would have overcome their poverty.
Shafir, however, claims that the real culprit isn't lack of ability but problems created by poverty. "These problems are distracting and cause mistakes," he told Markerweek in an interview.
"When you're poor you're surrounded by bad decisions of people around you," he says. "You're so concerned about the present that you can't begin thinking about the future, and that's the big irony: People with the greatest need to think about the future don't have the leisure or emotional capacity to do so. The very essence of poverty complicates decisions and makes immediate needs so urgent that you start making wrong choices. These mistakes aren't any different from anyone else's, but they occur more frequently due to the element of stress, and their implications are much greater."
Shafir, who was born in Israel and moved to the United States after his military service, has taught at Princeton University's Department of Psychology since 1989. The White House recently announced Shafir's appointment to President Barack Obama's Advisory Council on Financial Capability, which seeks to broaden financial education and make financial information widely accessible.
Shafir leads several initiatives developing policy to combat poverty, including ideas42, a Harvard-based think tank that Shafir co-directs with Mullainathan. The institute, which seeks solutions to social problems via behavioral economics, studies how people reach decisions.
Shafir has proved that anyone faced with adverse conditions will consistently make bad economic decisions. An experiment he conducted with Mullainathan and Zhao placed financially-savvy Princeton students from prominent families under the stressful and rushed conditions that poor people face every day. They were given questions to answer in a series of timed rounds, but were permitted to "borrow" time from a subsequent round.
"My students at Princeton are well-to-do and intelligent," Shafir says. "They are the sons and daughters of senators and other highly successful people. And yet these brilliant students took precisely 10 minutes to start borrowing too much; they were tending to the present without any thought to leaving something for the future.
"Given enough time, a person will consider the future cautiously. He won't engage in nonsense and won't borrow at high interest he can't afford. But if you put him under strict deadlines and pressure him, he'll start behaving foolishly. We all put off for tomorrow things that need to be done today, and pay high interest because we didn't pay on time. All the mistakes poor people make with money we make with time - but for them the price is too high. A person probably doesn't seem intelligent when he doesn't have enough time to consider the future, but if he did have enough time he would start acting intelligently. Poverty is an emotional state."
The poor subsidize the rich
But the poor make very logical financial decisions for the moment, says Shafir. "When you're poor, all your attention is focused on solving the poverty issue. The upshot is that you function quite successfully because you make wiser use of your shekel than I would," he says.
"I'm wasteful, forgetful and don't pay attention, but the poor are very conscious of the shekel's power. Shekel to shekel they cope beautifully. The problem is that when you're so focused on this, you don't notice all the rest. So you're the best shopper possible but forget to pay the electric bill - and this can cause very knotty problems. While you concentrate on one thing all the rest falls apart."
According to Shafir, "When I make a financial mistake I get upset and move on. When someone poor makes a mistake, he pays for it for months - even years. He needs to borrow at gouging interest to return the money, and it takes him months .... The entire structure crumbles beneath him, and it's hard to grasp how exhausting this is and how it leads to blunders. And this is all without mentioning the considerable differences between a poor living environment and others - from noise, dirt and education all the way to health care.
"If you're Robinson Crusoe you don't think ahead to what you'll build in two months, just to what you'll eat today. It's not a question of character - it's what you have. From the standpoint of sheer human ability, put the poor in the right environment and they'll behave like anyone else."
The problem is even greater when taking into account that the world does all it can to trample on the poor. "Think of all the means at our disposal to help us deal with time constraints. We have alarm clocks, helpers, nannies and dozens of other things helping us function with limited time," says Shafir.
"A poor person has very little. In fact, not only isn't he helped, he gets harassed, taken advantage of, cheated. I have a good lawyer, he has a lousy lawyer. My bank gives me all the possibilities to choose from that he doesn't get. It's not that the world just doesn't help the poor, it trips him up even further," he says.
"For example, it used to be common for banks in the U.S. to send me my credit card statement and let me pay it by June 20. It turned out that the 20th fell on a Sunday, so if I followed their advice I would be forced to pay late and it would cost me a $35 penalty. That's how it was until Obama made this practice illegal.
"If I needed to pay a $35 penalty I got tripped up, but what did I care? But with a poor person - his whole week is changed. The world isn't prepared to help him because the attitude is that he brought it on himself and can't be helped. By the way, my current account doesn't cost me a penny. The bank isn't a charity, so how does it do it? The poor subsidize me. Each time one of their checks bounce they subsidize my account - which doesn't have any fees attached."
Recently we've been hearing the slogan "We want justice, not charity." Policymakers, missing the point, continue talking about grants and handouts. Those solutions are worthless, says Shafir; throwing money at a problem merely perpetuates it.
"The poverty problem could be solved in two ways: Either make them wealthy or understand that context is a large part of the problem and make it easier on them," he says. "The matter could be tackled several ways; for instance, if employers or the government set up programs to help people save. A group of friends could establish a club that decides: 'Let's compel ourselves to look after one another and make sure we do the right things.'"
A human being buys herself a cake
Classical economics, as opposed to behavioral economics, doesn't take psychology into account, says Shafir, so welfare policy in the West has actually widened income gaps over the last few decades. "Classical economics assumes a person does things rationally," he says. "If he doesn't succeed then he apparently isn't smart enough, and this makes him poor. The behavioral economist says everyone makes mistakes, and if you leave them without assistance they'll blunder even more. Everyone errs, but when you have money the mistakes seem less severe."
One of the biggest problems, says Shafir, is the message the poor receive from the system: You're poor because you're no good. "It's very easy for the poor to swallow this idea," he says. "The attitude that the poor are less successful is very common and very wrong. These days the survivor is the one with luck: Once in a blue moon someone pulls through. So the system isn't 'survival of the fittest' at all."
Besides the enormous pressures on the poor, they often find themselves under sharp scrutiny, especially if they dare buy anything that seems extravagant. How could they waste NIS 100 at the hairdresser's, we ask, while their kids go hungry?
"What would you have them do?" wonders Shafir. "Can't they eat ice cream once in a while? The same lady who finishes the week with NIS 100 to spare and buys her kids a treat instead of saving it - even if she didn't buy it someone else around her would need the money. Her life is full of pitfalls. She too is entitled every now and then to give in to temptation and have some cake. So what? We also can't resist temptation: We're human."
According to Shafir, the main thing policymakers need to keep in mind is that people tend to behave passively rather than rationally.
"People's default pattern is to adopt a position and maintain it," he says. "They'll want to change something, plan to change it, intend to change it - but they won't. It happens to people at all levels, the successful and clever ones too.
"Take, for example, two scenarios we tested. Starting a job, they tell you 15% of your salary will go toward your pension and give you a phone number to call if you want to change it. 'Feel free to call and ask,' you're told. In the second scenario they tell you: 'Here's the phone number. Call and tell them to allocate up to 15% of your salary to your pension.' The result is that the respondents in the first scenario save toward their pensions four times as much as the second half, even though all it involves is one measly phone call. Welfare policy is based on the idea that if I understand and want something, maybe something could help me. But if you really want to help me, simply give it to me. Don't count on my finding the time and knowing what to do," he says.
"People take money from one account and transfer it to a savings account. An economist would see this as ridiculous, but from people's standpoint there's an account that isn't touched and another that's used. The chances of the money holding out are entirely different. If the government insists on an approach that says there's no difference, then it loses the ability to help me. It's important to understand human behavior and act accordingly."
Do you think this doesn't apply to you? Think again. The economic crisis and approaching recession are likely to push many of us into poverty. The statistics, Shafir says, are alarming. "One of every two Americans will reach a situation of real monetary scarcity within a few years: not abject poverty but real difficulty in maintaining a standard of living. The situation is obviously terrific compared to poverty in Sudan, but if my kid doesn't have a computer because I can't afford it while everyone in his school has one, it will make me feel poor," he says.
"Poverty is to a large extent an emotional state. If I can't afford to eat at a restaurant where I always ate, if I can't get through the month like I used to - that's scarcity. At that level many are about to become poor. The middle class is shrinking and many people are stressed about their future and their children's futures. Even among the top 1% there's worry. Some continue leading their normal lives, but many are tightening their belts: Doing less and buying less."
The economic crisis in the United States was largely the result of a human trait studied by behavioral economists like Shafir: Wanting it all, meaning people's tendency to disregard their financial situation, take on debt they can't handle and attain a standard of living they can't afford. When it became clear how irresponsibly Americans had behaved leading up to the crisis, many people said financial education from a young age was the solution. A ridiculous idea, says Shafir.
"You can't teach people finance," he says. "You can't teach someone to treat himself as a doctor would, maybe just raise his awareness about his body. The idea of educating people to do the right things financially is a bit absurd. It's like a diet: Part of it depends on me, but it would help if they didn't sell me fattening food. The solution is to improve the context, not the person."
Although scarcity and distress keep spreading as the crisis continues, people still refuse to accept this fact - and refuse to recognize the similarity between themselves and the poor. In fact, they aren't even willing to read about poverty. "I'm writing a book now with Sendhil, and to avoid the stigma of poverty we decided to have the title refer to time constraints. We'll sneak the poverty in afterwards, inside the book," he jokes.
The key to a positive change in society, according to Shafir, is grasping the importance of context in the decision-making processes of the poor and the non-poor, and building a social system that isn't based on ignoring it.
"First of all, the state must stop blaming the citizen. The protest movement was supported by 80% of Americans, and there is rarely anything 80% of Americans can agree on," he says.
"This means the method we developed hasn't worked, because you leave people with economic responsibility for their lives while most of them can't deal with it. The ability to take control, anticipate the future and plan for it is beyond their grasp. When you assume that a person is responsible for these things, you're saying that it's his mistake when it's actually yours - because you gave him responsibility that you shouldn't have. People need a framework that helps them. We're very talented creatures but we have a tendency to make mistakes."
