On the psychology of poverty

Johannes Haushofer, Ernst Fehr

Research output: Contribution to journalReview article

346 Scopus citations

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.

Original languageEnglish (US)
Pages (from-to)862-867
Number of pages6
JournalScience
Volume344
Issue number6186
DOIs
StatePublished - Jan 1 2014

All Science Journal Classification (ASJC) codes

  • General

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