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Poverty Leads to Bad Decisions: Researchers Claim Poor People Have Less 'Brainpower' Due to Financial Struggles

By Zulai Serrano z.serrano@hngn.com | Aug 29, 2013 03:00 PM EDT

Childhood Poverty and Chronic Stress Affects Brain Functions As Adults, Study Finds
Childhood Poverty and Chronic Stress Affects Brain Functions As Adults, Study Finds (Photo : Flickr )

New research findings suggest poverty contributes to less "brainpower" because those in "poor circumstances" have to concentrate on other areas of life, according to a University of British Columbia news release.

"Previous accounts of poverty have blamed the poor for their personal failings, or an environment that is not conducive to success," said lead author Jiaying Zhao, a University of British Columbia professor who conducted the study as a graduate student at Princeton University. "We're arguing that being poor can impair cognitive functioning, which hinders individuals' ability to make good decisions and can cause further poverty."

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The findings were published in the journal Science.  Researchers found "those with few resources are more likely to make bad decisions that perpetuate their financial woes," the University said.

The study suggests cognitive abilities for things like education, training and time-management decrease because of the mental stresses poverty can have on a person's mind.

Researchers offered the following information about the experiment:

In one set of experiments, the researchers found that pressing financial concerns had an immediate negative impact on the ability of low-income individuals to perform on common cognitive and logic tests. On average, a person preoccupied with money problems exhibited a drop in cognitive function similar to a 13-point dip in IQ, or the loss of an entire night's sleep. 

In another series of field experiments, the researchers found that farmers show diminished cognitive performance before getting paid for their harvest, compared to after when they had greater wealth. These differences in cognitive functioning could not be explained by differences in nutrition, physical exertion, time availability or stress. According to the study, the mental strain of poverty differs from stress, which can actually enhance a person's functioning in certain situations.

"When [people living in poverty] make mistakes, the outcomes of errors are more dear," study co-author Eldar Shafir said in a news release.  "So, if you are poor, you're more error prone and errors cost you more dearly - it's hard to find a way out."

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