Poverty Impedes Cognitive Function

Authors: Anandi Mani, Sendhil Mullainathan, Eldar Shafir, Jiaying Zhao


Numerous studies have shown an association between counterproductive behavior and poverty. Poor folks pay less attention to their health, are lazy, have low productive employees and are less attentive parents. It is seen that unprivileged people respond incompetently which further prolongs poverty. Impoverished persons are less educated and hence face more problems in daily life such as managing finances and poor parenting. People living in undeveloped places often face loan sharks that demand high-interest rates and terrible transport facilities. As the cognitive system of human beings has a limiting capacity, monetary concerns can lead to poor cognitive function. To understand the influence of financial disparities on mental capabilities a study was conducted. It was hypothesized that poverty leads to hindrance of cognitive ability. A laboratory study and a field study was conducted to determine the validity of the hypothesis.

Laboratory study
The wealthy and the poor individuals selected were urged to think about their daily financial needs. Let’s assume that these ordinary financial concerns have little influence on the rich but provoked disturbing concerns for the poor. 4 experiments were performed with customers at a shopping mall. The individuals had average earnings of $70,000 to $20,000.


Experiment 1
101 individuals were given 4 assumed scenarios portraying diverse financial issues faced in everyday life such as if your car broke down and you need to pay $X to fix it, so will you pay the full amount, take out a loan or just give up. Following the scenario were two digital tasks to determine cognitive ability. Raven’s Progressive Matrices is an ordinary challenge to calculate fluid intelligence that is the capability to judge rationally and figure out dilemmas during unfamiliar events regardless of the knowledge assimilated. In spatial compatibility tasks, individuals have to respond rapidly often against the primary impulse. Response speed and precision evaluate cognitive control. After completion of both tests, candidates registered their answers for the given scenario by typing or by audio recording. Hard scenarios convoluted higher prices ($1500) and easy conditions were set to have low prices ($150).
We assumed that low prices will raise fewer monetary issues for rich and poor and high prices will trigger concerns for the unprivileged but not for the wealthy. Results exhibited that for easy budgetary conditions both wealthy and poor had similar reactions. But for hard cases, poor individuals behaved considerably inferior in Raven and compatibility tests. Two ways Anova revealed a link among earnings and conditions. Wealthy persons were unaffected in both situations but generally poverty stricken were badly influenced by hard monetary issues.

Experiment 2
To avoid the possibility that results in 1st experiment were affected by math anxiety, another experiment was conducted with the same numbers where non-monetary questions were not used to avoid provoking financial issues. No significant results were obtained in this experiment showing no relation among complicated scenarios and income.

Experiment 3
In this experiment, remunerations were supplemented i.e. for a right answer $0.25 will be earned by participants. But the results exhibited that in easy settings poor responded likewise to the wealthy but in hard circumstances, they acted out worse. Wealthy folks did well in both easy and hard settings. So, there is a significant link between the scenario and income. Although poor folks needed money and were being awarded still they displayed poor performance.

Experiment 4
It was thought that cognitive tasks might have increased the burden on the mind as they were executed when individuals were pondering upon the scenario questions. This part was similar to experiment 1, the only difference was that individuals answered the scenarios before moving on to cognitive tests. Results showed that wealthy and poor individuals showed the same results in easy circumstances but for hard scenarios, the response of poor people worsened greatly. So the situation significantly influenced the poor.

Field Study

To validate the monetary concerns in naturally occurring circumstances 464 sugarcane farmers from various villages in India were selected. These farmers owned small farms and 60% of their earnings were from sugarcane. They were interviewed before harvesting and after harvesting periods. The calendar effect was a challenge for pre/post-harvest periods as different crops harvest at different times of the year, such as in June and in August.
Results suggest that farmers were economically burdened before the harvesting phase as they pawned belongings and took out loans. Raven’s test and numeric version of the Stroop test were used to test cognitive behavior. Response rate and precision were measured. More precise results were obtained for both tasks post-harvest as compared to pre-harvest. The frequency of errors was greater before harvesting.
It was thought that physical labor to prepare land for sowing crops and crop productivity might have taken a toll on farmers in the pre-harvest period. However, sugarcane farmers use external labor and crop yield is estimated before harvest season. It was assumed that farmers performed well after the harvest season because they took the test for the 2nd time. To rule out this possibility, 100 random farmers were selected and were examined post-harvest and a comparison of results declared no effect of training. Stress might be considered as a justification of obtained results. Heart rate and blood pressure were recorded as indicators of stress in 2009. Farmers were greatly stressed before harvest with high blood pressure and heart rate. So it was concluded that poverty exerts stress and thus hinders the cognitive function of the brain. However, further investigation is needed to determine other potential causes.

New Perspectives on Policy

Being financially poor not only means having no money to fulfil necessary needs but it also impairs one's mental ability to solve problems. Poor people tend to be under more stress and appear less capable and energetic as they have a lot on their minds. Policymakers should take initiative for unprivileged people by taking into account various issues that poor people face, realizing their cognitive ability and making it easier for them to understand.

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