Scarcity changes how we think

The feeling of lacking something captivates us and reorients us toward those unfulfilled needs

By Sendhil Mullainathan - Eldar Shafir

Published September 8, 2013 12:30PM (EDT)

Adapted from Scarcity

When we told an economist colleague that we were studying scarcity, he remarked, “There is already a science of scarcity. You might have heard of it. It’s called economics.” He was right, of course. Economics defines itself as the study of how we use our limited means to achieve our unlimited desires; how people and societies manage physical scarcity. If you spend money on a new coat, you have less money for a dinner out. If the government spends money on an experimental procedure for prostate cancer, there is less money for highway safety.

It is unarguable that all of us have a limited amount of money; even the richest person cannot buy everything. But we have observed that while physical scarcity is ubiquitous, the feeling of scarcity is not. Imagine a day at work where your calendar is sprinkled with a few meetings and your to-do list is manageable. You spend the unscheduled time by lingering at lunch or at a meeting or calling a colleague to catch up. Now, imagine another day at work where your calendar is chock full of meetings. What little free time you have must be sunk into a project that is overdue. In both cases time is physically scarce. You had the same number of hours at work and you had more than enough activities to fill them. Yet in one case you were acutely aware of scarcity, of the finiteness of time; in the other it was a distant reality, if you felt it at all. Only on one of the days did you have a scarcity mindset. Though physical scarcity is ubiquitous, the scarcity mindset is not.

A recent study shows what we mean by the scarcity mindset. Participants were asked to come to a lab around lunchtime, not having eaten for three to four hours. Half of these hungry subjects were sent out to grab lunch, the others weren’t. Their task in the study was simple: Watch a screen. A word will flash. Identify the word you just saw. So, for example, TAKE might flash and subjects would have to decide whether they just saw TAKE or RAKE. This seems a trivial task and it would have been except that everything happened quickly. Very quickly. The word itself flashes for 33 milliseconds— that is, 1/30 of a second.

Now you might think that the subjects who had not yet eaten lunch might do worse, being tired and unfocused from their hunger. But on this particular task, they did just as well. Except in one case. The hungry did much better on food-related words. They were much more likely to accurately detect the word CAKE. Tasks such as these are designed to tell us what is at the top of someone’s mind. When a concept occupies our thoughts, we see words related to it more quickly. So when the hungry recognize CAKE more quickly, we see directly that food is at the top of their minds.

This study illustrates the central element of the scarcity mindset: scarcity captures the mind. When we experience scarcity of any kind, we also become absorbed by it. The mind orients automatically, powerfully, toward unfulfilled needs. For the hungry, that need is food. For the busy it might be a project that needs to be finished. For the cash-strapped it might be this month’s rent payment; for the lonely, a lack of companionship. Scarcity changes how we think. It imposes itself on our minds.

And it does so also on a subconscious level. The tiny time scales in the hunger study—outcomes measured in milliseconds—were devised to observe fast processes, fast enough to remain beyond conscious control. We now know enough about the brain to know what these time scales mean. Complex higher-order calculations require more than 300 milliseconds. Faster responses rely on more automatic subconscious processes. So when the hungry recognize CAKE more quickly, it is not because they choose to focus more on this word. It happens faster than they could choose to do anything.

And by focusing the mind, scarcity has benefits. Picture yourself writing a book. Imagine that the chapter you are working on is due in several weeks. You sit down to write. After a few sentences you remember an email that needs attention. When you open your inbox, you see other emails that require a response. Before you know it, half an hour has passed and you’re still on email. Knowing you need to write, you return to your few meager sentences. And then, while “writing,” you catch your mind wandering: How long have you been contemplating whether to have pizza for lunch, when your last cholesterol check was, and whether you updated your life insurance policy to your new address? How long have you been drifting from thought to vaguely related thought? And so the day continues: you manage to get in a little bit of writing, but far less than you had hoped.

Now imagine the same situation a month later. The chapter is due in a couple of days, not in several weeks. This time when you sit down to write, you do so with a sense of urgency. When your colleague’s email comes to mind, you press on rather than get distracted. And best of all, you may be so focused that the email may not even register. Your mind does not wander to lunch, cholesterol checks, or life insurance policies. By day’s end this focus pays off: you manage to write a significant chunk of the chapter. Having less time, feeling scarcity, led to more work.

Psychologists have studied the benefits of time scarcity in more controlled experiments. In one study, undergraduates were paid to proofread three essays and were given a long deadline: they had three weeks to complete the task. Their pay depended on how many errors they found and on finishing on time; they had to turn in all the essays by the third week. In a nice twist, the researchers created a second group with more scarcity—tighter deadlines. They had to turn in one proofread essay every week, for the same three weeks. The result? The group with tighter deadlines was more productive. They were late less often (although they had more deadlines to miss), they found more typos, and they earned more money.

This impact of time scarcity has been observed in many disparate fields. In large-scale marketing experiments, some customers are mailed a coupon with an expiration date, while others are mailed a similar coupon that does not expire. Despite being valid for a longer period of time, the coupons with no expiration date are less likely to be used. Without the scarcity of time, the coupon does not draw focus and may be forgotten. In another domain, organizational researchers find that salespeople work hardest in the last weeks (or days) of a sales cycle. In one study we ran, we found that data-entry workers worked harder as payday got closer. Researchers find something similar in how meetings -- all types of meetings -- unfold. They all begin unfocused, the discussion abstract or tangential. But then, halfway through the meeting, things change. There is a midcourse correction. The group realizes that time is running out and becomes serious.

Time scarcity is effective because it focuses the mind. We put more time into the task. Distractions are less tempting. You do not linger at lunch when the chapter is due soon, and you do not waste time on tangents when the meeting is about to end.

Scarcity captures us because it is important, worthy of our attention, but we cannot fully choose when our minds will be riveted. We focus on scarcity even when we do not want to. We think about that impending project not only when we sit down to work on it but also when we are at home trying to help our child with her homework. The same automatic capture that helps us focus becomes a burden in the rest of life. Because we are preoccupied by scarcity, because our minds constantly return to it, we have less mind to give to the rest of life.

Imagine that you are surfing the web on your laptop. On a reasonably fast computer, you easily go from page to page. But imagine now that there are many other programs open in the background. You have some music playing, files downloading, and a bunch of browser windows open. Suddenly, you are crawling, not surfing, the web. These background programs are eating up processor cycles. Your browser is limping along because it has less computing power to work with.

Scarcity does something similar to our mental processor. By constantly loading the mind with other processes, it leaves less “mind” for the task at hand. Scarcity directly reduces what we call bandwidth—not a person’s inherent capacity for thinking and understanding but how much of that capacity is currently available for use.

We tested this idea on sugarcane farmers. (The study, conducted with the economist Anandi Mani and the psychologist Jiaying Zhao was published this week in Science.) These farmers receive their income in a big lump, all at once at harvest time. This means the same farmer is rich in the months after harvest and poor in the months before harvest. We then examined the same farmer’s bandwidth at these particular times of the year. Instead of comparing rich and poor people, we’d be seeing how the same person behaves differently when tight for cash and when flush with cash. We measured two components of the farmers’ bandwidth: “executive control” (our ability to manage our cognitive activities, including planning, attention, initiating and inhibiting actions, and controlling impulses) and “fluid intelligence” (the ability to think abstractly and solve problems independent of any specific learning or experience).

These sugarcane farmers performed much worse on both sets of tests in the months before harvest than in the months after harvest. In other words, the same person was measured as less intelligent and more impulsive when he was poor, compared to when he was rich. And the effects were large. The postharvest farmers got about 25 percent more items correct on the fluid intelligence test, which corresponds to about nine or ten IQ points.

Scientists tend to measure what their theories tell them to measure. Because economists focus on the material dimensions of scarcity, they measure how many people are unemployed, what was produced in a particular quarter, what earnings were, and so on. Yet we know next to nothing about the cognitive side of the economy. If scarcity affects bandwidth, should not bandwidth fluctuate with economic circumstances?

We know that the events of 2008 created a major economic recession. Might it also have created a profound cognitive recession? What if while unemployment was climbing, the quality of people's decisions was dropping? We do not have the data to answer these questions. And while it is too late to gauge this for 2008, it is not too late to collect these data for future booms and recessions. There has been an effort in recent years to measure societal well-being, to create a measure of Gross National Happiness to go along with Gross National Product. Why not also measure Gross National Bandwidth?

Scarcity is not just a physical constraint, as economics emphasizes. It is a mindset. When scarcity captures our attention, it changes how we think— whether it is at the level of milliseconds, hours, or days and weeks. By staying top of mind, it affects what we notice, how we weigh our choices, how we deliberate, and ultimately what we decide and how we behave. When we function under scarcity, we represent, manage, and deal with problems differently. Some fields have studied mindsets created by particular instances of scarcity: how dieting affects mood, or how a particular cultural context might affect the attitudes of the local poor. Our research shows that scarcity itself, in every form, creates a particular mindset. And this mindset can help explain many of the behaviors and the consequences of scarcity. Whether you're poor, busy, lonely, or just dieting, scarcity captures your mind. It's worth thinking about -- if you have the bandwidth -- the next time you find yourself racing against a deadline.

Adapted from Scarcity: Why Having Too Little Means so Much by Sendhil Mullainathan and Eldar Shafir, published September 3rd by Times Books, an imprint of Henry Holt and Company, LLC. Copyright (c) 2013 by Sendhil Mullainathan and Eldar Shafir. All rights reserved.

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