Why Mental Bandwidth Could Explain the Psychology Behind Poverty

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Think about the last time you were really busy — maybe work was more stressful than usual, you had a sick kid or the car was in the shop. Did things in your life start to slip through the cracks? A bill or two didn’t get paid on time, or you opened the fridge and were surprised to find it bare?

According to University of Pennsylvania economist Heather Schofield, that experience is a perfect example of what she and fellow researchers call “bandwidth,” or the capacity of the brain’s ability to perform basic functions that underlie both higher-order behavior and decision-making. When bandwidth is taxed, there’s less of it available for use in other judgements or decisions, leading to some potentially undesirable choices (a late fee on your Visa, for example, or a trip through a drive-thru instead of heading to the grocery store).

In her recent paper, “The Psychological Lives of the Poor,” Schofield, a professor in the department of medical ethics and health policy at Penn’s Perelman School of Medicine and a operations, information, and decisions professor at Wharton, and her co-authors — economists Frank Schilbach of the Massachusetts Institute of Technology and Sendhil Mullainathan of Harvard University — reviewed research on bandwidth and how it may affect the psychology behind poverty. Specifically, Schofield says, they posit that poverty may reduce the available cognitive bandwidth to the point where one’s ability to make better choices could be severely reduced.

In other words, Schofield says, people in poverty may not be making bad choices because they are somehow different from those who are more affluent. They just may lack the bandwidth necessary to make good ones.

“There are often stereotypes of people who make bad choices, and we’re really trying to understand what’s driving that. Is it the person or their circumstances?”

“There are often stereotypes of people who make bad choices, and we’re really trying to understand what’s driving that. Is it the person or their circumstances?” she said. “They may have all the baseline capacity, but there’s a greater tax on bandwidth because of their poverty. There’s just less of a scope to allow them to make good choices.”

A Two-system Model

According to the paper, the brain operates on a two-system model: System 1 is the intuitive, automatic and effortless portion, which is prone to biases and errors; System 2 can produce accurate and unbiased results but is slower, more effortful and deliberate. Decreased bandwidth makes it less likely that a person can use their System 2 brain processes when making decisions, leaving it up to the more reactionary System 1 to do the heavy lifting.

Both systems are “scare resources, the taxing of which causes negative spillovers to other aspects of cognitive functioning,” according to the paper. Those spillovers include effects on decision-making, productivity and utility.

In addition, effects may vary depending on the aspects of bandwidth which are impacted. “Your attention [can be] strong, but your ability to reason [can be] weak. There’s not a perfect one-to-one association,” Schofield notes. “There’s more to be done on the measurement side on how these factors change and how well-correlated they are.”

When factors associated with poverty — nutrition, alcohol and monetary concerns — are considered, a reduction in bandwidth can be measured, according to the paper.

For example, earlier research by Schofield found evidence from an experiment in which rickshaw drivers in India with low body-mass indices performed a series of tasks. In one, subjects searched through a grid for a specific set of symbols; the task required mental stamina, making it a natural measure of the effect of poor nutrition on bandwidth.

Those rickshaw drivers who were randomly assigned to have higher caloric intake showed an almost immediate 12% improvement in performance on such tasks, a gain that was sustained by the end of the experiment, according to the paper.

Other data show similar effects when manipulating alcohol intake and monetary concerns, the latter of which covers both having less money to buy things but also spending more of one’s bandwidth managing that money, according to the paper.

“Even when the poor are not actually making financial decisions, these preoccupations can be distracting. Thinking and fretting about money can effectively tax bandwidth,” according to the paper.

“Even when the poor are not actually making financial decisions, these preoccupations can be distracting. Thinking and fretting about money can effectively tax bandwidth.”

Schofield says other factors associated with poverty, such as air pollution, sleep deprivation and chronic pain, are well worth studying to determine the depth of the connection between poverty and bandwidth and how the two can influence each other.

“I think there’s a strong possibility of some sort of feedback loop,” she says. “If you start out poor and there’s a tax on your bandwidth capacity as well, then it means you have less money to spend to address the environmental factors that are driving those choices. It has the potential for a vicious cycle.”

Schofield’s work is part of a deepening study of the psychological world of the poor, from collecting better financial data on poverty to increased behavioral economic studies and trying to ascertain what factors drive which outcomes. Further examination in those studies and more examination of bandwidth could lead to a better understanding of poverty and a separation of ill-formed assumptions from conclusions backed by solid data, Schofield says.

“There’s certainly some interest and some movement to think about these aspects of poverty and how to influence the downstream decisions we care about,” she notes. “There’s a lot to think about both from a policy angle and an academic perspective.”

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