Economic Decision-making in Poverty Depletes Behavioral Control

Dean Spears
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Dean Spears: Princeton University

No 1293, Working Papers from Princeton University, Department of Economics, Center for Economic Policy Studies.

Abstract: Economic theory and common sense suggest that time preference can cause or perpetuate poverty. Might poverty also or instead cause impatient or impulsive behavior? This paper reports a randomized lab experiment and a partially randomized field experiment, both in India, and analysis of the American Time Use Survey. In all three studies, poverty is associated with diminished behavioral control. The primary contribution is to isolate the direction of causality from poverty to behavior; three theoretical mechanisms from psychology cannot be definitively separated. One supported explanation is that poverty, by making economic decision-making more difficult for the poor, depletes cognitive control.

Keywords: impatient; impulsive behavior; poverty; psychology; cognative control (search for similar items in EconPapers)
JEL-codes: D19 D63 I39 J19 (search for similar items in EconPapers)
Date: 2010-12
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:pri:cepsud:213

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