New study finds poverty leads people to focus on short term goals while ignoring the long view
Friday, November 2, 2012 - 09:01
in Psychology & Sociology
(Phys.org)—A new study done by a team of researchers with business, psychology and economics backgrounds suggests that people who live in poverty tend to make poor long term financial decisions because their economic situation makes it difficult to focus on anything but the near term. They have published a paper in the journal Science describing lab experiments they've conducted that they say show that when faced with limited resources, people tend to focus on the needs at hand, rather than the long term, which might explain seemingly contradictory behavior exhibited by poor people, such as taking out high interest loans.