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Understanding the psychology of poverty

Poverty

Photo: Frank Montanez

Whenever I teach Intro to Psychology, one of my favorite topics to cover is the cognitive revolution. During the continuing revolution, much attention has been paid to human decision-making processes. Most of us like to believe that our intellect, our experiences and our perceived expertise lead us to make rational and well-informed decisions. But, mountains of research clearly show otherwise: human beings are highly irrational decision makers, irrespective of intellectual ability.

The work of Daniel Kahneman and Amos Tversky, two pioneers in the revolution, showed that we tend to overestimate the occurrence of scenarios that most easily come to mind, a phenomenon called the availability heuristic. Many folks, for example, since the events of September 11th, have resisted air travel and opted for other means of (more dangerous) transportation, even though those decisions are statistically irrational.

But more importantly, Kahneman and Tversky also showed that people’s decision making is affected by the manner in which a choice is framed, particularly when it comes to taking or avoiding risk.

As a result, even highly intelligent individuals easily make irrational decisions surrounding risk.

This line of research has subsequently produced another mountain of studies over the past two decades, which have applied the lessons of human decision making to greater systemic issues. The studies have generated enormous implications, particularly with respect to systemic poverty.

The answers have been quite clear: the experience of poverty generates its own psychology.

For great examples, let’s turn to the work of Eldar Shafir and Sendhil Mullainathan. In multiple studies, Shafir and Mullainathan (along with other researchers) have found that:

  • The experience of poverty produces a lot of cognitive demands. In short, folks who are poor have to worry about a ton of things that no one else has to, which also increases overall stress.  These are worries that many of us take for granted on a daily basis, such as having enough bus fare to get to the grocery store, or choosing between paying the electric bill or heating bill in the winter time.
  • The experience of scarcity and cognitive demands has a tremendous negative impact on decision making, particularly with respect to finances. The poor face a constant sense of urgency, and in that urgency, tend to fall victim to making financial decisions that provide immediate short-term relief, but with negative long-term consequences.  For example, many are forced to take out payday or short-term emergency loans, which often carry with them exponentially large interest rates.
  • The stress of constant scarcity produces similar irrational financial decisions even among those of high intelligence.  For example, Shafir and Mullainathan (along with other researchers) showed that even in samples of Ivy League college students, being pressed for both time and resources on various tasks led to a series of irrational decisions, in which they borrowed excessively and repeatedly into greater debt.
  • The cycle of systemic poverty is perpetuated by the constant presence of scarcity and cognitive demands, as well as by the backlash that the poor receive whenever they engage in any behavior that is deemed “leisurely” or stress-reducing.

Unfortunately, the lack of empathy produced when one ignores mountains of research is disheartening. Those of us who do not live in poverty have a tendency to vilify the poor and blame them for their supposed laziness, lack of intelligence or willingness to make bad decisions. It is evident, however, that if faced with the same difficult choices, our decisions would be nearly identical.

Systemic poverty will not be cured with egocentrism, nor will it vanish by regurgitating platitudes about so-called “hard work.”

About Nick Baez

Nick Baez, M.S. is a native of New York, New York (Lower East Side) and currently resides in Denver, Colorado. Throughout his academic and professional career, he has been a scholar in the fields of psychotherapy, anger and aggression research, trauma, youth leadership initiatives, and teaching. Committed to sound research and program development, Nick has been instrumental in tailoring programs to fit the needs of various communities, and subsequently evaluating those programs to ensure that they meet goals and standards. Most recently, Nick was the Mental Health therapist at Centennial High School in Fort Collins, CO. He has been a psychotherapist for 7 years, and specializes in adolescent populations. He has worked extensively with the National Hispanic Institute for 15 years, serving initially as a junior volunteer and currently as a senior staff member and senior alumnus. Through his work with the National Hispanic Institute, Nick has worked closely with thousands of high school students in helping develop initiatives to prepare them for leadership in the 21st century. Nick has conducted peer-reviewed research on risky behavior, anger, anger expression, and aggression, and has been previously recognized for his work by the Rocky Mountain Psychological Association. Nick has also done research on psychological trauma and its effects on cognition and interpersonal relationships. He has been invited on numerous occasions to give special lectures on trauma, co-dependency, ethnic identity, and social conflict.

A cum laude graduate of the College of Natural Sciences at Colorado State University in Fort Collins, CO, Nick holds a degree in Psychology. He additionally holds a Masters degree in Counseling Psychology from Colorado State University, and is currently a doctoral candidate there.

Disclaimer: The views and opinions expressed in this article are solely those of the author and should not be understood to be shared by Being Latino, Inc.

Comments

  1. This is AWESOME.

  2. Dope post

  3. Nick Baez’s accolades are impressive to say the least, best wishes to him with all his ongoing academic studies,research and work that he are doing. I found this article quite moving, and completely agree with what he is saying, I would have liked it though if he could have answered his (excellent) cliffhanger question at the end of the article in regards to: ‘how is systematic poverty going to be solved?’. I am currently a 2nd yr college student navigating to ‘lock-down’ my major so that I can apply to transfer this Fall, and I want to help cure systematic poverty, I’m just not sure how that will eventually transpire. Thanks for your article!

  4. Seriously an incredibly fascinating and relevant piece. This reminds me of Naomi Klein’s The Shock Doctrine- it highlights the inability of people to make informed rational decisions post immediate trauma that leaves them in shock and how the gov’t capitalizes on this vulnerability. I show it to my Sociology students… It’s so interesting!

    http://www.youtube.com/watch?v=aSF0e6oO_tw&feature=youtube_gdata_player

  5. This is PURE psycho-babble. Does anyone need “mountains of research” to convince you that owing more than you earn is stressful? I’m sorry, but this is the type of “education” that those that live outside of academia are all too familiar with. The best is the part about hard work being a “regurgitation platitude”? LOL. Really,… Btw, some people made bad decisions in life, and some made good ones. SOme people are not motivated, some are. Some are born in a nurturing and property modest apartment, some are brought up with a room full of gadgets and really stupid parents. I don’t personally know anyone that hates “poor”people, but I know plenty that can’t stand seeing minority teens sitting all day in beach chairs outside of Foot Locker for a pair of kicks.

  6. Just to be clear, I don’t hate this author. But, I despise the constant handicapping and lack of ownership that people portray for their situation. It has nothing to do with empathy. Empathy does not motivate.

  7. ^^^very compelling video, thank you for sharing!! ^^

  8. Very well written. But don’t look to Big Government or socialism to solve the poverty of many because our government keeps throwing money at a problem but the problem doesn’t go away, and socialism either leads to slavery like in Cuba or the former USSR or to the financial problems that Europe is going through now. There will always be poverty no matter how much government initiatives or charity is directed towards it – it’s just a sad reality of life and fancy 10 dollar ivory tower ideas that look good on paper are not going to end it but maybe perpetuate it.

  9. @ Kev Sa- I respect your opinion, but I still have to side with the article because having empathy is not the same as having pity or embracing the handicapping and lack of personal ownership for ones’ life circumstances, true empathy enables all humans to view the commonalities and help each other other out. We hear this time and time again ‘we all have our own struggles, and we have to find the motivation within ourselves to make the difference’, but success, or merely surviving the everyday cannot happen alone. Many of us have people who have helped us along the way regardless if you are rich or poor and that is what empathy is about to me.

  10. Susan Denecke says:

    I cannot help but think that people making the negative comments haven’t spent much time around people in poverty. That, or they managed to break the cycle of poverty and expect that everyone can as well. It reminds me of some of my earliest experiences in human services working in a domestic violence shelter, and the workers that were hardest on the clients and most judgmental, were those who been through the experience themselves and didn’t see why everyone couldn’t follow their path out.
    I do believe in personal responsibility, but I also believe in Matthew 7:1, judge not lest ye be judged.

Trackbacks

  1. [...] my previous article, I discussed a phenomenon that is often overlooked by policymakers and pundits: how the experience [...]

  2. [...] people trapped in poverty exposes why power begets power and inequity protects the status quo, as Nick Baez explains about the psychology of poverty: “As a result, even highly intelligent individuals easily make irrational decisions [...]

  3. [...] in the U.S. Latino community, and as I have stated before (along with many other researchers), the effects of poverty are widespread and insidious.  In addition to directly causing a higher prevalence of mental health issues, Latinos living [...]

  4. [...] the experience of systemic poverty as a significant risk factor. This is not surprising, given that the effects of systemic poverty are widespread and insidious, and include poor access to proper nutrition, exposure to greater [...]

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