Study: When resources are scarce, most people forfeit the future
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Poor people are often criticized for self-defeating behaviors, from taking out high-interest payday loans as a way of getting through the week, to not putting aside money for the future.
But a new study published today in Science magazine suggests that most of us are likely to behave that way when we are faced with a shortage of resources.
Experiments put college students in "rich" and "poor" groups as they played a series of games. Students in the "poor" groups were given less time or fewer chances to win at the games than those in the "rich" groups.
The result? "Poor" students focused much more intensely on the immediate task at hand, and they were more likely to take out "loans" of time or chances to keep playing a game, even though it depleted their resources for future rounds.
Anuj Shah, a behavioral science professor at the University of Chicago, said the experiments, by researchers at his school and Harvard and Princeton universities, had students play versions of Wheel of Fortune, Angry Birds and Family Feud.
There were two primary results. First, they demonstrated that short-sighted behavior is not unique to poor people.
"It's kind of striking that when you take people from the Princeton University community and put them in a situation where there is a shortfall of resources, they behave just like people who have been out of work for some time," he said. "Is it something about being poor? Or is it something about being in a situation of scarcity?"
The other lesson is that these behaviors don't just occur when money is tight.
Among middle-class people, another common example of scarcity is time.
"When people are facing a deadline, they become much more focused on that task, and they may even 'borrow' by asking for an extension, which means they might end up leaving themselves less time for future tasks," he said.
In the Wheel of Fortune game, "poor" students got six guesses per round to try to guess the words making up a phrase, while "rich" students got 20 guesses per round. As the "poor" students focused on making the most of their fewer choices, they also used up more energy.
In a subsequent game where students had to press different keys when they saw dots on a computer screen, the "poor" students performed significantly worse than the "rich" ones.
A real-world example of this issue might be the criticism low-income mothers sometimes face for not investing in their children's futures by reading to them, Mr. Shah said.
"Here's a parent who may be managing many different demands, working two jobs or taking several buses to get to work, and so reading to your kid is something that's hard to do when you're very tired and fatigued. It's not necessarily about not being oriented to the child's future, but just that you're tired."
When the students played versions of Angry Birds, a computer game where players use a slingshot to fire birds at targets, and Family Feud, where they try to guess the most popular answers to certain statements, they were sometimes allowed to borrow shots or numbers of guesses from future rounds, and in some cases, they had to pay steep "interest" by borrowing two shots from the future to get one in the present, for instance.
Not only did "poor" students borrow more often, but they performed worse when they did so, Mr. Shah said, and they often borrowed proportionately more as the game went on -- not very different from a person taking out a second payday loan to pay off the first one.
Two local poverty experts said the Science study makes a lot of sense to them.
Christina Fong, a senior research scientist at Carnegie Mellon University who studies poverty and discrimination, said "this particular study falls on the side of saying that the poor are not as individually responsible for poverty as we might otherwise have thought."
Donna Little, executive director of Rainbow Kitchen Community Services, which provides food, clothing and nutrition help to low-income Pittsburghers, said the study's conclusions made a lot of sense to her.
"The biggest point it seems to be making," she said, "is this: It isn't just that poor people do things one way, and others do things another way, but that this is the way we all behave as humans."
Mr. Shah said his research suggests that poor people do care about the future, but look at it in a different way than more affluent people do.
"Poor people often are saving for specific things like a new appliance or a daughter's wedding," he said, and can find those goals overshadowed by how much attention they have to pay to daily needs.
To counteract that, he said, some social scientists are experimenting with providing regular reminders to people about their savings goals. Innovations for Poverty Action, a group headed by Yale University economics professor Dean Karlan, has done experiments with poor people where one group got text message reminders about contributing to their savings plans. Those who got the messages saved 6 percent more than those who didn't.
Ms. Little said she hopes studies like these will give people a more tolerant view of the problems poor people face.
"I think sometimes we believe that if we can identify something that makes 'us' different from 'them,' it helps us to reassure ourselves that we don't have to worry about these issues, but it sounds to me like this study is saying 'No, we're not that different from each other.' "
First Published November 2, 2012 12:00 am