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Scarcity

Why Having Too Little Means So Much by Sendhil Mullainathan and Eldar Shafir

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Shortages can gnaw at more than your belly. Mullainathan and Shafir argue that scarcity — whether of food, time or anything else — changes how you think. At the personal level, focusing on what’s lacking induces irrational patterns of thinking, changing a person’s behavior and laying traps that spring later.

“Scarcity captures the mind,” write the authors, an economist and a psychologist. In research on hunger in the 1940s, volunteers who ate very little food for months didn’t just lose weight. Their attitudes changed. They began talking about cookbooks and reciting restaurant menus. After watching a movie, many could not recall the plot but remembered what each character ate.

Hunger and other kinds of scarcity induce a mindset that gobbles up inordinate portions of a person’s cognitive capacity (SN: 12/1/12, p. 17). It’s not always bad: Scarcity can hone focus. A lack of time, for instance, can drive a student to write a term paper on deadline. But this concentration involves a kind of tunnel thinking that can be risky.

Time is scarce for firefighters, for example, with sometimes fatal consequences. Up to one-fourth of on-duty firefighter deaths between 1984 and 2000 were caused not by fires but by motor vehicle accidents, and most of those who died en route were not wearing seat belts. Firefighters tackle a checklist of tasks on their way to a fire and can lose sight of matters outside their “tunnel” of concentration, such as buckling up.

The authors contend that scarcity often explains why people make bad choices, such as poor people taking out payday loans. Mullainathan and Shafir portray these distortions in thinking not through brain scans but by using simple tests that reveal when people aren’t thinking straight. Farmers in India, for instance, fared poorly on IQ tests in the anxious months preceding harvest, then did better post-harvest, with less on their minds (SN: 10/15/13, p. 10).

The white-collar version would be new office employees with cluttered mental bandwidth putting off optional tasks such as filling out forms for 401(k) retirement plans. It costs them later. Better policies might head off some of these mistakes: When people are automatically enrolled in a 401(k) plan and need to take action not to enroll, 80 percent adopt this sensible long-term strategy. In companies that require a person to “opt in” the participation rate is only 45 percent.

The authors link scarcity neatly to dubious planning, but the reader is left hoping for more solutions to these mindset traps. One of the best remedies they describe skirts the whole issue. To get rural Indians to take the time to vaccinate their children — a task with delayed benefits — they offered a kilo of lentils. The parents showed up.

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