The psychology of poverty: negativity bias and inter-temporal choices – PovertyCognition

Poverty is associated with a wide range of detrimental outcomes ranging from increased rates of teenage pregnancies to diminished investment in health and education. There are of course many causes behind these behaviours but recent work highlights the potential role of psychological changes that arise in response to environmental scarcity. Specifically, harsh environments are known to trigger psychological changes that lead individuals to invest in short-term rather than long-term goals. This shift has important down-the-road consequences on many life decisions, including health, education or even interpersonal trust. However, the exact nature of the cognitive mechanisms that are at play in this association needs to be elucidated. Recent theoretical and empirical work suggest that poverty may compound the over-evaluation of risks. Compared to people living in favourable environments, people living in adversity might indeed suffer a double hit: their life circumstances are objectively unfavourable and they appear to perceive their surroundings as even more negative than they actually are. The goal of this proposal is to systematically assess whether poverty is indeed associated with an increased negativity bias, to pinpoint the cognitive mechanism by which this occurs and to test the extent to which the negativity bias affects inter-temporal preferences for abstract as well as real-life choices linked to health and education.

The proposed project is organized in three interrelated axes that will allow us to systematically assess whether and why poverty is associated with cognitive biases that lead individuals to overestimate the existence of threats (Axis 1), whether such misperceptions shift behaviours in predictable ways (Axis 2), and whether experimental manipulations provide evidence of a causal relationship between environmental adversity and these downstream psychological outcomes (Axis 3).

By acting as a conduit bringing together cognitive science and economics, this proposal has the potential to make important contributions. Indeed, despite recent interest in the psychology of poverty, a proper identification of the cognitive mechanisms that trigger the behaviours associated with deprivation has lagged behind. This is in part due to the fact that traditional methods in experimental psychology often do not allow researchers to access large and diverse participant pools. Thanks to the complementarity of the team involved in this project, we will be able to apply large-scale testing to maximize variability and to statistically model patterns of variations on multiple cognitive and behavioural traits. Another significant barrier is that projects investigating the psychology of poverty often fall short of providing properly causal explanations. Indeed, unlike many fields in cognitive psychology where participants can be randomized to various experimental conditions in order to test the causal impact of a given factor, individuals can obviously not be randomized to living in favourable or adverse environments. This specific barrier will be lifted by implementing experimental and quasi-experimental manipulations of environmental adversity.

Given the domains in which a gradient of economic deprivation has been observed, the potential societal implications are important and should not be based purely on correlatory evidence. Our proposal aims to achieve precisely that goal, by going all the way from a fundamental research question in cognitive psychology to producing causal data that can inform evidence-based policy recommendations.