I recently had a short conversation with a coworker about poverty and providing social services. My coworker expressed the opinion that he’s reluctant to provide social services to poor people since he has observed poor people spending money on luxury items. I told him that I disagreed, but unfortunately we were interrupted by work and never got to finish the conversation.
I’ve been thinking about this conversation since then, and while I have some very firm opinions on this matter, it dawned on me that I may not be able to communicate them very coherently. So, I took this issue to Facebook to get input from friends.
One friend pointed me to research on the psychology of poverty. In summary, the additional cognitive load of being poor directly contributes to poor people making poor decisions. With a little searching, I found this paper (PDF) which offers a good analogy of how one aspect of this works:
Imagine packing for a trip, using either a small or large suitcase. If you have a large suitcase, it is an easy task to pack everything important with room to spare. You may even choose not to completely fill the suitcase. With a small suitcase, however, the task becomes much more complex. If not all important items will fit, you must consider trade-offs, such as what to take out if one more item is added. The suitcase can represent any resource, such as money. In that case, someone with ample resources can easily purchase all needed items with money left over. They may consider the wisdom and value of a particular small purchase, but are not likely to explicitly consider what other item must be given up in its place. In contrast, someone with limited funds must spend a lot of time and mental energy thinking about what to purchase, as each item chosen means some other item or items is foregone. In other words, having fewer resources makes decision-making much more complex. Complex problems draw on limited cognitive resources, which in turn means that there are fewer resources available for self-control.