Scarcity, says Professor Eldar Shafir, taxes the mind and makes it hard to think
Professor Eldar Shafir studies how scarcity leads to bad financial decisions, making poverty even harder to escape. He conducted some of his research in a shopping mall.
Professor Eldar Shafir studies how scarcity leads to bad financial decisions, making poverty even harder to escape. He conducted some of his research in a shopping mall.
Sameer A. Khan

In Scarcity: Why Having Too Little Means So Much (Times Books), Shafir, a Princeton professor of psychology and public affairs, and co-author Sendhil Mullainathan, a Harvard economist, use the term “bandwidth” to describe the capacity of the human mind. When people face scarcity — think of a dieter who is distracted by a shortage of food — it taxes their bandwidth, leaving them unable to perform at their full ability. Scarcity “makes us dumber. It makes us more impulsive,” the authors write.

Shafir’s research began as a look at behavioral patterns among the poor, but it developed into a larger study of the “psychology of not having enough,” he says. People in poverty are especially vulnerable to the effects of scarcity. After all, they must deal with it every day. In some cases, scarcity can sharpen their skills: People without money, for example, are more aware of the value of a dollar. Yet in many cases, they grasp at ideas, like high-interest loans, which perpetuate poverty. And scarcity makes people too distracted to perform well in other ways. One study found that children from families who receive food stamps were most likely to misbehave at school at the end of the month — when their families tend to run out of food stamps. 

“Being a good parent requires many things,” the authors write. “But most of all it requires freedom of mind. That is one luxury the poor do not have.”

To respond to these mental burdens, Shafir and Mullainathan make several policy recommendations. Educational programs aimed at the poor might offer staggered schedules to accommodate less predictable lifestyles. The professors also offer suggestions for businesses that face scarcity of time: They should allow some “slack” — extra, unplanned time — to absorb spikes in activity. 

Shafir’s book on scarcity is in keeping with his larger interest in how behavior shapes decision-making. He recently edited The Behavioral Patterns of Public Policy, a collection of articles that was greeted with special interest by policymakers. The book covers topics as diverse as “mindless eating,” the reliability of eyewitness testimony, and ways to encourage saving for retirement. 

The goal of this kind of research, Shafir says, is to find ways to “design policy a little bit better, given the idiosyncrasies of human behavior.”