Poverty causes constant distraction that is like losing 13 IQ points

In a series of experiments run by researchers at Princeton, Harvard, and the University of Warwick, low-income people who were primed to think about financial problems performed poorly on a series of cognition tests, saddled with a mental load that was the equivalent of losing an entire night’s sleep. Put another way, the condition of poverty imposed a mental burden akin to losing 13 IQ points, or comparable to the cognitive difference that’s been observed between chronic alcoholics and normal adults.

Advice for better performance
– do not drink
– get a good nights sleep
– get in an undistracted mental state

What Shafir and his colleagues have identified is not exactly stress. Rather, poverty imposes something else on people that impedes them even when biological markers of stress (like elevated heart rates and blood pressure) aren’t present. Stress can also positively affect us in small quantities. An athlete under stress, for example, may actually perform better. Stress follows a kind of classic curve: a little bit can help, but beyond a certain point, too much of it will harm us.

This picture of cognitive bandwidth looks different. To study it, the researchers performed two sets of experiments. In the first, about 400 randomly chosen people in a New Jersey mall were asked how they would respond to a scenario where their car required either $150 or $1,500 in repairs. Would they pay for the work in full, take out of a loan, or put off the repair? How would they make that decision? The subjects varied in annual income from $20,000 to $70,000.

Before responding, the subjects were given a series of common tests (identifying sequences of shapes and numbers, for example) measuring cognitive function and fluid intelligence. In the easier scenario, where the hypothetical repair cost only $150, subjects classified as “poor” and “rich” performed equally well on these tests. But the “poor” subjects performed noticeably worse in the $1,500 scenario. Simply asking these people to think about financial problems taxed their mental bandwidth.

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