How Scarcity Trap Affects Our Thinking, Behavior

NPR:

Let’s hear now about a new book that explores a major source of stress. The book is called “Scarcity” and it’s a look at what happens to us when we’re pressured with too little time or too little money. The authors say “Scarcity” actually changes how we think. NPR’s social science correspondent Shankar Vedantam explains.

Each September the state of Massachusetts asks one thing from “Scarcity” author and Harvard economist, Sendhil Mullainathan, to renew his car inspection sticker and each year this recipient of the MacArthur Genius Award does the same thing. He’s really busy, so on each day leading up to the expiration of the sticker, he tells himself he’ll attend to it the next day

…

Not having enough money and not having enough time, might not seem like similar things, but psychologically, they are similar. You’re running low on something you desperately need, you feel the pinch of scarcity. Mullainathan turned to a colleague of Princeton, the psychologist Eldar Shafir. That conversation lead to the book, “Scarcity,” which they wrote together.

Just as Mullainathan was asking why he mismanaged his own time, Shafir said he was asking why the poor make bad financial decisions.

Read the whole story: NPR