'Scarcity': Brother, can you spare ... anything?

Scarcity makes us dumber and more impulsive and makes us look differently at problems, study says

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In a culture obsessed with money and materialism, we have a tendency to think of scarcity mainly as it pertains to a lack of financial resources. But scarcity comes in all shapes and sizes.

If the very definition of scarcity means having less of anything than we feel we need, then busy people are scarce on time; dieters are scarce on food; and the lonely are scarce on friends and companionship.

Sendhil Mullainathan and Eldar Shafir examine the mindset caused by lack and shortage in "Scarcity: Why Having Too Little Means So Much." Drawing on research from behavioral science and economics, they found that when we experience scarcity of any kind, we become absorbed by it.



By Sendhil Mullainathan and Eldar Shafir.
Times Books ($28).

When we struggle to stick to a diet, our minds often are clouded with thoughts of food. Those who are broke and financially hard up find themselves preoccupied with how to pay this month's rent, while the lonely tend to focus on their lack of companionship.

Their central theme revolves around the idea that we must broaden our notion of scarcity beyond having little money to spend. Scarcity is a tax on the brain that leaves less room for productive thinking, forcing us to get by with fewer mental resources. Scarcity actually changes how we think and can cause us to make all kinds of poor choices that we regret later on. Scarcity even creates its own vicious treadmill.

When the credit cards are maxed out, checks are bouncing, the landlord is threatening eviction and creditors are ringing the phone off the hook, it actually fuels a terrible cycle of falling behind. Mr. Mullainathan, a Harvard University professor of economics, and Mr. Shafir, a Princeton University professor of psychology and public affairs, are co-founders of ideas42, a New York-based nonprofit that designs behavioral economic solutions to social problems.

They cite a number of studies and experiments involving the impact of starvation on study subjects during World War II, the effect that deadlines (scarcity of time) have on productivity and the mindset of sugar cane farmers before and after harvest to illustrate a point: People who function under conditions of scarcity develop a certain mindset -- and deal with their problems differently.

Scarcity doesn't just cause people to overborrow or fail to invest. It leaves them hindered in other areas of their lives as well.

"It makes us dumber," the authors wrote. "It makes us more impulsive. We get by with less mind available, with less fluid intelligence and with diminished executive control -- making life that much harder.

"When we function under scarcity, we deal with problems differently because we are preoccupied by scarcity, because our minds constantly return to it, we have less mind to give to the rest of life. The experience of scarcity reduces one's bandwidth, or mental capacity. Being poor will reduce bandwidth, and the poor make bad decisions."

The study highlights the impact of scarcity in everyday life. It gives us insight into why the stressed-out manager with an important pending sales presentation cannot fully focus on his child's school performance, or why the overworked, underpaid cashier snaps at a rude customer when he had not intended to, or why the student with a looming tuition bill finds it more difficult to focus on an upcoming exam.

It also provides us with a different view of why the poor stay poor, why the busy stay busy, why the lonely stay lonely and why most diets are often doomed to failure.

Tim Grant: tgrant@post- gazette.com or 412-263-1591.

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