THE CONVERSATION is IMPORTANT
The big problems that we face are known. The United Nations had identified goals to be met by 2030 – no poverty, no hunger, social equality, access to safe water, good health and well-being, greener energy, and sustainable consumption – many of these tied to living under scarcity with hopes to change. However, most of these goals will not be met by 2030. Knowing more about thinking, judgment, and decision making among the poor or in contexts of scarcity and poverty can be crucial to help us move toward the big problems at hand. But what do we know?
For about half a century, a lot has been learned about how we as humans make judgments and take decisions. We have understood fundamentally how many of these judgments and decisions are well-founded and how many others are full of errors, biases, and noise. We have debated different kinds of rationality based on these empirical findings across disciplines – from psychology, philosophy, economics, and neuroscience. We have discussed ways in which we think – sometimes fast and sometimes slow or move back and forth; along with how these processes take place in the brain. However, there is a need to think this through.
concerns
01 Point of concern: Studies done, but not on poor
The top scholarly papers in the field are the first place to look for knowledge about how people think and decide. The published studies on which most of our hope is built have been conducted (and are being conducted) on the elite – or what some have called a Western Industrialized Educated Rich Democratic (WIERD) group. Take, for example, the classic and most highly cited papers in the field below in Table 1. Many flagship studies on which the field rests have been conducted on college students – many of them in world-renowned institutions – mostly where the author has been working. Extremely few had stepped out of its campuses to understand what really naive people – and, more importantly, poor people think, judge, or decide. This problem persists outside the developed countries. If one looks at studies in developing countries like India (including those done by the PI in previous years), most of them are on college students and few on typical Westernized educated middle-class participants.
| Study | Authors | Participant pool |
|---|---|---|
| Judgment under Uncertainty: Heuristics and Biases | Tversky & Kahneman, 1974 | Mostly undocumented who the participants were, or high school students, psychologists, and “naive subjects” |
| Prospect theory | Kahneman & Tversky, 1979 | Students and faculty at University of Stockholm and Michigan |
| Advances in Prospect Theory | Tversky & Kahneman, 1992 | Students at University of California, Berkeley and Stanford University |
| Anomalies: The Endowment effect, Loss aversion, and status quo bias | Kahneman, Knetsch & Thaler, 1991 | UG students from Cornell University |
| The framing of decisions and the psychology of choice | Tversky & Kahneman, 1981 | Students at the universities of Stanford and British Columbia |
| Models of Ecological Rationality: The Recognition Heuristic | Goldstein & Gigerenzer, 2002 | Students at the University of Chicago. |
Table1. Sample of participants used in some key studies in judgment and decision making
One might argue that this is not a problem because everyone thinks similarly at the foundational level. Maybe, maybe not. Nevertheless, our best option might be to empirically answer it by doing decision research among the poor.
- Culturalist position: The poor manifest patterns of behavior and values that are characteristically distinct from others.
- Situational position: The poor are normal outcomes of situations where the dominant social structure is unfavorably disposed of and restricts choices. Hence, they are possibly not really distinct.
Both positions necessitate empirical investigations. Additionally, there is a need to underscore the need to represent the socioeconomic background of participants as a gap to fill both nationally and internationally.
02 Point of concern: Studied the poor, but not many are focused on decision making and thinking
A lot of empirical work has been done by economists – especially those interested in poverty and development by using empirical experimental methods – mostly via randomized control trials. One group is subjected to one experimental condition (iodine tablet costing 5 Rs), and the other group is subjected to another experimental condition (free iodine tablet), and then their downstream action is checked (did they use it in the water that is being consumed at home). The long-term effects of targeting the ultra-poor (for example, by Banerjee and Duflo) have been conducted on poor people across countries, but without necessarily focusing on individual decision processes. Further, there are strong debates on the methodology of such studies and their implications. While this kind of work has shown much promise, it falls short of studying the cognitive process and psychology of how decisions are made.
03 Point of concern: Worked with the poor, but not asked the questions that are closely related to thinking and decision making
Other professionals and organizations (like UNICEF, ASHA workers in India, and others) working in social development and social work have tirelessly worked to improve the lives of people across the world, including in India. While the work is directly connected to motivating behavior change, awareness campaigns, advocacy, and more – all very useful in the field, it does not quite address the question of how the poor think, judge, and decide.
Creating an agenda
To broaden our understanding of the mind and lives of the poor, we must foreground the focus on thinking and decision making. A handful of studies have started to look into it. A few examples include the effect of introducing scarcity experimentally within the lab where some participants are set to be poor (Shah et al., 2012), studying the impact of scarcity on cognitive function among farmers (Mani et al., 2013), checking for decision biases under scarcity (Shah, Shafir & Mullainathan, 2015), finding if socioeconomic differences predict neurocognitive performance (Hackman & Farah, 2009), and investigating if there are fundamental differences in the brains of the poor (Maguire & Schneider, 2019). We owe acknowledgment to the book ‘Scarcity’ by Mullainathan and Shafir in 2013. An edited volume by Mohanty and Misra on the psychology of poverty and disadvantage in India in 2000 made an attempt about two decades back. But, there are many open questions – some global and some local.
• How do the decision theories work out among the poor? • What are individual decision strategies – both in stylized artificial context-free tasks and actual real-life contextual decisions • How do individuals vs groups of poor people decide? • How do they make judgments about now and the future? Does the existing knowledge in decision research and behavioral economics work among the poor? • How do they use their time? plan? • How do they use / interact with technology to solve problems and make decisions • What are their perception and preferences about a host of things that we never bothered studying? • How are their brains and minds similar and different? • What are the big and small decisions in their lives? • And everything in-between and beyond…
We know really little about how people from low socioeconomic backgrounds think and make decisions.
While some interests have been spread, we need a dedicated agenda – possibly rooted in developing countries to build up a research programme for cognition and decision making under scarcity and poverty. It would need to establish the basic principles and foundations that then can be tested among different low socio-economic populations, generate new empirical findings, consolidate previous research into understandable insights for all, have multi-disciplinary conversations with others who could provide relevant inputs or perspectives, and possibly bring the voices of the poor to the table, and interact with organizations and governments to develop a broader appreciation about the minds and lives of the poor. It can develop a cognitive view of poverty.
References:
Hackman, D. A., & Farah, M. J. (2009). Socioeconomic status and the developing brain. Trends in cognitive sciences, 13(2), 65-73.
Maguire, M. J., & Schneider, J. M. (2019). Socioeconomic status-related differences in resting state EEG activity correspond to differences in vocabulary and working memory in grade school. Brain and cognition, 137, 103619.
Mullainathan, S., & Shafir, E. (2013). Scarcity: Why having too little means so much. NY: Macmillan.
Shah, A. K., Mullainathan, S., & Shafir, E. (2012). Some consequences of having too little. Science, 338(6107), 682-685.
Shah, A. K., Shafir, E., & Mullainathan, S. (2015). Scarcity frames value. Psychological science, 26(4), 402-412.
