A Review of Consequences of Poverty on Economic Decision-Making: A Hypothesized Model of a Cognitive Mechanism

Executive functions (EFs) make possible mentally playing with ideas; taking the time to think before acting; meeting novel, unanticipated challenges; resisting temptations; and staying focused. Core EFs are inhibition [response inhibition (self-control—resisting temptations and resisting acting impulsively) and interference control (selective attention and cognitive inhibition)], working memory, and cognitive flexibility (including creatively thinking “outside the box,” seeing anything from different perspectives, and quickly and flexibly adapting to changed circumstances). The developmental progression and representative measures of each are discussed. Controversies are addressed (e.g., the relation between EFs and fluid intelligence, self-regulation, executive attention, and effortful control, and the relation between working memory and inhibition and attention). The importance of social, emotional, and physical health for cognitive health is discussed because stress, lack of sleep, loneliness, or lack of exercise each impair EFs. That EFs are trainable and can be improved with practice is addressed, including diverse methods tried thus far.

The poor often behave in less capable ways, which can further perpetuate poverty. We hypothesize that poverty directly impedes cognitive function and present two studies that test this hypothesis. First, we experimentally induced thoughts about finances and found that this reduces cognitive performance among poor but not in well-off participants. Second, we examined the cognitive function of farmers over the planting cycle. We found that the same farmer shows diminished cognitive performance before harvest, when poor, as compared with after harvest, when rich. This cannot be explained by differences in time available, nutrition, or work effort. Nor can it be explained with stress: Although farmers do show more stress before harvest, that does not account for diminished cognitive performance. Instead, it appears that poverty itself reduces cognitive capacity. We suggest that this is because poverty-related concerns consume mental resources, leaving less for other tasks. These data provide a previously unexamined perspective and help explain a spectrum of behaviors among the poor. We discuss some implications for poverty policy.

Given assertions of the theoretical, empirical, and practical importance of self-control, this meta-analytic study sought to review evidence concerning the relationship between dispositional self-control and behavior. The authors provide a brief overview over prominent theories of self-control, identifying implicit assumptions surrounding the effects of self-control that warrant empirical testing. They report the results of a meta-analysis of 102 studies (total N = 32,648) investigating the behavioral effects of self-control using the Self-Control Scale, the Barratt Impulsiveness Scale, and the Low Self-Control Scale. A small to medium positive effect of self-control on behavior was found for the three scales. Only the Self-Control Scale allowed for a fine-grained analysis of conceptual moderators of the self-control behavior relation. Specifically, self-control (measured by the Self-Control Scale) related similarly to the performance of desired behaviors and the inhibition of undesired behaviors, but its effects varied dramatically across life domains (e.g., achievement, adjustment). In addition, the associations between self-control and behavior were significantly stronger for automatic (as compared to controlled) behavior and for imagined (as compared to actual) behavior.