Decisions in poverty contexts

doi:10.1016/j.copsyc.2017.08.026

Current Opinion in Psychology

Volume 18, December 2017, Pages 131-136

https://doi.org/10.1016/j.copsyc.2017.08.026 Get rights and content

Highlights

•
The context of poverty produces persistent and cognitively taxing hardship.
•
In poverty, thoughts about money are spontaneous, intrusive, and hard to suppress.
•
Instead of respect and help, the poor encounter disdain and obstacles.
•
It is essential that policy makers appreciate the power of the context of poverty.

The circumstances surrounding poverty — tight financial challenges, instability of income and expenses, low savings, no insurance, and several other stressors — translate into persistent and cognitively taxing hardship for people in poverty contexts. Thoughts about money and expenses loom large, shape mental associations, interfere with other experiences, and are difficult to suppress. The persistent juggling of insufficient resources affects attention, cognitive resources, and ensuing decisions. Despite the demanding struggle with challenging circumstances, people in poverty encounter disdain rather than admiration, and obstacles rather than support. Societal appreciation for the power of context, along with behaviorally informed programs designed to facilitate life under poverty, are essential for those in poverty contexts to be able to make the most of their challenging circumstances.

Section snippets

The context of poverty

Beyond levels of mere survival, poverty is partly a matter of norms and construal. As societies progress and norms evolve, things that were once considered luxurious can become commonplace. Tap water in the home, for example, was inconceivable in the mid-nineteenth century, and is still a dream in many places today. And yet, in the US, where tap water is now entirely normal, you can have it in your home and still be poor. Adam Smith, the Scottish economic thinker, explained it simply:

‘A linen

The poverty mindset

Living in a context of scarcity and chaos, with no slack, where income instability requires a constant juggling of pressing tasks, affects people's attentional resources and decisions. When you manage scarce resources, you need to do so with great care. You do not have the luxury that abundance brings of being able to make mistakes. Persistent vigilance is required since any miscalculation or distraction can have dire consequences. Thoughts about money and finances are top-of-mind. Pressing

Society's approach to poverty

Remarkably, while the poor face multiple challenges and ongoing struggles, instead of respect they encounter disdain, and instead of help they face innumerable obstacles. Studies shows that the poor are scorned, perceived as incompetent, and disrespected [39, 40]. The stigma of poverty includes the feeling of being viewed as a societal burden, lazy and unmotivated. Such ‘welfare stigma’ [41, 42], can lead to cognitive distancing [41, 43] and underperformance [44] among the poor, including

References and recommended reading

Papers of particular interest, published within the period of review, have been highlighted as:

• of special interest

Conflict of interest statement

Nothing declared.

Acknowledgements

The author gratefully acknowledges support from the National Science Foundation (Award SES-1426642), and the Sloan Foundation (Grant 2014-6-16).

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Hence the relevance to shed light on the potential negative impact of poverty concerns on the acceptance and WTP for healthier foods among lower-income consumers. The sources of worry in low- income areas are diverse, including financial hardship, neighbourhood level stressors, such as crime and noise, and limited access to health care (Shafir, 2017). In our experiment, we chose financial and health concerns, as the former is an obvious problem, and the latter was predetermined as a major source of concern during focus groups in the research area.
Living in poverty can present cognitive biases that exacerbate constraints to achieving healthier diets. Better diets could imply food choice upgrades within certain food categories, such as electing processed foods with an improved nutritional profile. This study evaluated the influence of monetary and health concerns on the willingness to pay (WTP) for healthier processed foods in a low-income section of Mexico City. We employed priming techniques from the scarcity literature, which are applied for the first time to healthier food purchasing behaviours in low-income settings. Our predictions are based on a dual system framework, with choices resulting from the interaction of deliberative and affective aspects. The WTP was elicited through a BDM mechanism with 423 participants. Results showed that induced poverty concerns reduced the valuations of one of the study’s healthier food varieties by 0.17 standard deviations. The latter effect did not differ by income level. The WTP for a healthier bread product but one with relatively high sugar and fat content was reduced by induced poverty concerns only among certain consumers without bread purchasing restrictions (78% of the sample). Potential mechanisms were assessed through regression analysis and structural equation modelling. The relationship between poverty concerns and WTP was mediated by increased levels of stress. While we could not rule out impact on cognitive load, it was not deemed a mediator in this study. Our findings signal that improvements in economic and psychological well-being among low-income consumers may aid to increase their demand for healthier processed foods.
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In order for the assistance we extend to others to be maximally effective—whether interpersonally or institutionally—we need both givers to extend the help and recipients to utilize the assistance made available to them. Although much organizational behavior research has explored ways to increase prosocial behavior and charitable giving, comparatively little organizational scholarship has explored the recipient’s perspective. We believe that organizational behavior scholars, and social scientists more broadly, need to broaden their focus to examining why recipients in need of help sometimes neglect to utilize help. This paper proposes our Aid Utility Theory as a new way of thinking about and tackling aid utilization neglect, while also synthesizing prior social scientific literature that aims to improve aid utilization. We conclude with future directions for organizational behavior scholars who are interested in researching the perspective of those receiving help and improving global aid effectiveness. (145 words)
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Investigation regarding the perspectives of mothers who experience worries and make decisions to bedshare are needed to better understand our findings. We hypothesized that, due to the financial challenges and stressors associated with living in poverty, mothers with lower income and educational attainment would report more total worries.22 We did not find an association between income or educational attainment and number of total worries, likely due to the fact that maternal worries are so highly prevalent among US mothers and etiologies of worries are multifactorial.
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View all citing articles on Scopus

View full text

Decisions in poverty contexts

Highlights

Section snippets

The context of poverty

The poverty mindset

Society's approach to poverty

References and recommended reading

Conflict of interest statement

Acknowledgements

Moving personality beyond the person-situation debate: the challenge and the opportunity of within-person variability

Curr Dir Psychol Sci

The Person and the Situation: Perspectives of Social Psychology

The Wealth of Nations

The Great Risk Shift: The New Economic Security and the Decline of the American Dream

$2.00 a day: Living on Almost Nothing in America

The persistence of poverty in the context of financial instability: a behavioral perspective

J Policy Anal Manage

Using Financial Innovation to Support Savers: From Coercion to Excitement

Financially Fragile Households: Evidence and Implications (No. w17072)

Financial services, saving and borrowing among low- and moderate income households: evidence from the Detroit area household financial services survey

The Financial Diaries: How American Families Cope in a World of Uncertainty

Out of Reach

2015 FDIC National Survey of Unbanked and Underbanked Households

Fringe Banking: Check-cashing Outlets, Pawnshops, and the Poor

Nonstandard Work Schedules and the Well-Being of Low-Income Families

No Slack: The Financial Lives of Low-income Americans

Making Ends Meet: How Single Mothers Survive Welfare and Low-wage Work

Poverty is not just an indicator: the relationship between income, poverty, and child well-being

Acad Pediatr

Evicted: Poverty and Profit in the American City

Poverty and the American family: a decade in review

J Marriage Fam

Community trust reduces myopic decisions of low-income individuals

Proc Natl Acad Sci U S A

Long-term neighborhood effects on low-income families: evidence from moving to opportunity

Am Econ Rev

Socioeconomic status and chronic stress: does stress account for SES effects on health?

Ann NY Acad Sci

The Poor Have More Things Today—Including Wild Income Swings

On the psychology of drinking: being thirsty and perceptually ready

Br J Psychol

Evidence of motivational influences in early visual perception: hunger modulates conscious access

Psychol Sci

Some consequences of having too little

Science

Scarcity: Why Having Too Little Means So Much