Distracted Into Debt
THE SOURCE: “Some Consequences of Having Too Little” by Anuj K. Shah, Sendhil Mullainathan, and Eldar Shafir, in Science, Nov. 2, 2012.
Why do poor people so often waste money and pile up debt? For years, social scientists have blamed environmental factors and personality traits unique to the poor. But Anuj K. Shah, a behavioral scientist at the University of Chicago, Harvard economist Sendhil Mullainathan, and Eldar Shafir, a professor of psychology at Princeton, say something both more innate and more universal is at work.
Call it the tunnel vision of scarcity. When funds are low, all humans—not just the poor—focus much more intently on short-term demands. We put so much cognitive energy into immediate concerns...