Some Consequences of Having Too Little

TLDR

Poor individuals often engage in behaviors such as excessive borrowing that reinforce poverty, and explanations focus on personality traits or environmental factors like housing and financial access. The study proposes that scarcity itself drives behaviors by altering attention allocation, which may explain overborrowing and other poverty puzzles. Scarcity shifts attention, causing deeper focus on some problems while neglecting others. Experiments demonstrate that scarcity‑induced attentional shifts explain overborrowing.

Abstract

Poor individuals often engage in behaviors, such as excessive borrowing, that reinforce the conditions of poverty. Some explanations for these behaviors focus on personality traits of the poor. Others emphasize environmental factors such as housing or financial access. We instead consider how certain behaviors stem simply from having less. We suggest that scarcity changes how people allocate attention: It leads them to engage more deeply in some problems while neglecting others. Across several experiments, we show that scarcity leads to attentional shifts that can help to explain behaviors such as overborrowing. We discuss how this mechanism might also explain other puzzles of poverty.