Poverty, Financial Decision-making, and Willpower
Every decision dips into a limited willpower pool.
Posted Jun 05, 2012
This is America. We’re all supposed to be able to pull ourselves up by our bootstraps, right? Even if they don’t have any boots. Many in this country believe that the poor are poor because they lack the will to change their situation. So what role does willpower play in poverty and financial decision-making in general?
Recent research on willpower depletion and impulse buying has suggested that poor financial decision-making may have much to do with willpower depletion. In one study, those who had previously exerted self-control in a lab exercise reported experiencing more temptation to buy and did purchase a larger number of items and spent a greater amount of money than participants who hadn’t performed the willpower draining task.
Another study done by Princeton University doctoral candidate Dean Spears offered participants an opportunity to purchase a popular brand of body soap at a significantly discounted price. The soap was a good deal, but it represented a very difficult financial choice for individuals living in poverty. Before and after the soap was offered, the participants were asked to squeeze an exercise hand grip as a test of self-control strength. In his study, richer participants squeezed the hand grip for about the same length of time before and after the soap purchasing opportunity. The poor participants squeezed for a significantly shorter duration the second time around. He concluded that their willpower had been run down by their difficult decision-making. Spears in another study with a cross-section of American shoppers supported these findings.
These findings suggest that it is not that poor people have less willpower than the rich, but that for people living in poverty every decision, even ones that most of us would assume are not difficult ones, such as buying a personal care product such soap, requires the use of self-control and dips into what many researchers believe is a limited willpower pool, not just for the poor, but for everyone. More about this in the next blog.
For more information on willpower and the studies that were discussed in this blog, go to the American Psychological Association. “What You Need to Know about Willpower, the Psychological Science of Self-control,” written by Kirsten Weir, www.apahelpcenter.org.