WASHINGTON -- Being short on cash may make you a bit slower in the brain, a new study suggests.
People worrying about having enough money to pay bills tend to lose temporarily the equivalent of 13 IQ points, scientists found when they gave intelligence tests to shoppers at a New Jersey mall and farmers in India.
The idea is that financial stress monopolizes thinking, making other calculations slower and more difficult, like the effects of going without sleep for a night.
And this money-and-brain crunch applies to about 100 million Americans who face financial squeezes, say the team of economists and psychologists who wrote the study in Friday's issue of the journal Science.
"When we think about people who are financially stressed, we think they are short on money," said Harvard economist Sendhil Mullainathan, a study co-author, "but the truth is they are also short on cognitive capacity."
In controlled lablike conditions, scientists had about 400 shoppers at Quaker Bridge Mall in central New Jersey consider certain financial scenarios and tested their brain power. Then they looked at real life in the fields of India, where farmers get paid just once a year. Before the harvest, they take out loans and pawn goods. After they sell their harvest, they are flush with cash.
Mr. Mullainathan and colleagues tested the same 464 farmers before and after the harvest, and IQ scores improved by 25 percent when their wallets fattened.
In the New Jersey part of the study, scientists tested about 400 shoppers, presenting them with scenarios that involved a large and a small car-repair bill. Those with family incomes of about $20,000 scored about the same as those with $70,000 incomes on IQ tests when the car bill was small. But when poorer people were faced with a whopping repair bill, IQ scores dropped 40 percent.
Education differences can't be a major factor, because the poor only scored worse when they were faced with big bills, said Princeton University psychology professor Eldar Shafir, a study co-author.
The study's authors and others say the results contradict long-standing conservative economic social and political theory that say it is individuals -- not circumstances -- that are the primary problem with poverty.