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On the psychology of poverty


Haushofer, Johannes; Fehr, Ernst (2014). On the psychology of poverty. Science, 344(6186):862-867.

Abstract

Poverty remains one of the most pressing problems facing the world; the mechanisms through which poverty arises and perpetuates itself, however, are not well understood. Here, we examine the evidence for the hypothesis that poverty may have particular psychological consequences that can lead to economic behaviors that make it difficult to escape poverty. The evidence indicates that poverty causes stress and negative affective states which in turn may lead to short-sighted and risk-averse decision-making, possibly by limiting attention and favoring habitual behaviors at the expense of goal-directed ones. Together, these relationships may constitute a feedback loop that contributes to the perpetuation of poverty. We conclude by pointing toward specific gaps in our knowledge and outlining poverty alleviation programs that this mechanism suggests.

Abstract

Poverty remains one of the most pressing problems facing the world; the mechanisms through which poverty arises and perpetuates itself, however, are not well understood. Here, we examine the evidence for the hypothesis that poverty may have particular psychological consequences that can lead to economic behaviors that make it difficult to escape poverty. The evidence indicates that poverty causes stress and negative affective states which in turn may lead to short-sighted and risk-averse decision-making, possibly by limiting attention and favoring habitual behaviors at the expense of goal-directed ones. Together, these relationships may constitute a feedback loop that contributes to the perpetuation of poverty. We conclude by pointing toward specific gaps in our knowledge and outlining poverty alleviation programs that this mechanism suggests.

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98 citations in Web of Science®
94 citations in Scopus®
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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Language:English
Date:23 May 2014
Deposited On:14 Oct 2014 11:41
Last Modified:05 Apr 2016 18:25
Publisher:American Association for the Advancement of Science
ISSN:0036-8075
Additional Information:This is the author's version of the work. It is posted here by permission of the AAAS for personal use, not for redistribution. The definitive version was published in Science Vol. 344 no. 6186 pp. 862-867 DOI: 10.1126/science.1232491
Free access at:Publisher DOI. An embargo period may apply.
Publisher DOI:https://doi.org/10.1126/science.1232491

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