Scarcity and the Brain
Some interesting discoveries on the effects of scarcity of important resources on the way the brain processes information. Of special note are the studies that observed the same individuals in conditions of scarcity and abundance, thus eliminating issues of personal character from the differences in observed decision-making. This bolsters the authors' argument that efforts to help people out of poverty needs to focus on getting them the tools to overcome the deleterious effects of scarcity on the brain's executive function, such as providing encouragement to save during times of relative abundance, when people feel comfortable enough to think about the future instead of focusing on immediate survival, or arranging for reminders and prompts of upcoming obligations a day or two in advance, to keep things from falling off the radar of a person who's constantly trying to juggle too many demands on scant resources. Or making training programs more flexible and forgiving of the occasional hiccup in people's lives, such as a babysitter who fails to show or transportation that leaves them in the lurch (whether it be a car that breaks down or a bus that runs late).
As a small-business owner with a business model that gives us sudden large influxes of money with intermittent droughts between them, I can attest to the way scarcity shortens one's time horizons. No matter how much we may want to save for the long term, we have to survive in the short term for the long term to be of any benefit. A big example, when the roof on the addition went bad, we could've saved several hundred bucks by paying cash -- but with the leaks so bad that it was literally raining inside the house, there was no way to hobble it any further, and we wouldn't have the cash on hand until our next big convention, almost a month away. So it ended up costing us quite a bit more, simply because the emergency fund we used to have was drained by previous emergencies and we haven't been able to replenish it. A smaller example: the need to keep the regular bills paid becomes an obstacle to paying off the debt from previous misfortunes and replenishing our depleted emergency fund. Not to mention that just the feeling of being on a treadmill can be exhausting in itself.
As a small-business owner with a business model that gives us sudden large influxes of money with intermittent droughts between them, I can attest to the way scarcity shortens one's time horizons. No matter how much we may want to save for the long term, we have to survive in the short term for the long term to be of any benefit. A big example, when the roof on the addition went bad, we could've saved several hundred bucks by paying cash -- but with the leaks so bad that it was literally raining inside the house, there was no way to hobble it any further, and we wouldn't have the cash on hand until our next big convention, almost a month away. So it ended up costing us quite a bit more, simply because the emergency fund we used to have was drained by previous emergencies and we haven't been able to replenish it. A smaller example: the need to keep the regular bills paid becomes an obstacle to paying off the debt from previous misfortunes and replenishing our depleted emergency fund. Not to mention that just the feeling of being on a treadmill can be exhausting in itself.