How poverty changes your mindset

Either the article does a poor job describing the research, or I find it somewhat incomplete. I mean there is an inherent misconception that $1000 item/asset is much much better than a $300 equivalent. I am curious how that affects the valuation between different groups of individuals.

It is interesting you say this. I have a friend who struggles to get by. Single mom, two kids, a father who does the absolute bare minimum to provide support to his kids, and she is unemployed.

She does get support from the state (rent assistance, energy assistance, SNAP), but it is barely enough to squeak by and what little money is left over is quickly consumed with unexpected expenses.

With that said, I find she spends an exorbitant amount of time searching for "deals". It is not far-fetched for her to spend 2-3 hours to save a $1 on something. While apps like ebates, ibotta, etc.. have made these quick deals better, they still don't cut down on the time she spends. With the apps she spends just as much time searching through the deals or trying to find the best store to get something.

While it can be frustrating at times as a third-party sitting back watching her do this, I can somewhat sympathize. The most frustrating part to me is that she will sometimes say that there is not enough time in the day to get things done. I try to convey to her that at some point time is money. Meaning that she needs to evaluate the opportunity cost of saving a dollar versus spending 2-3 hours to save that dollar.

When I was 17 I went through a period of near destitute. I was living on my own, my father had passed away, and I had dropped out of school. Yet, I found myself with some very good jobs, such as GE Capital, a big Oil and Gas companies IT department, etc.

Regardless of the opportunity, my arrogance, ambivalence, or immaturity (take your pick) cost me a series of good jobs in short order. The result was I had no money, no electricity, no gas for my car, and not much to do. Eating cold beans out of a can in the dark tends to force you to re-think your priorities.

In my case, I got very motivated very quickly and dug myself out of that hole after a few months. I think that's the point Orrin Hatch was trying to make. If I had a fallback, I would have, without a doubt, kept coasting along from job to job. I've never looked at work or money the same way since as I never want to find myself there again.

So long story short, being poor (by my own doing) didn't necessarily motivate me, but looking into oblivion sure as hell did.

It's what, essentially, Adam Smith railed against in Wealth of Nations, arguing that wealth was not gold and silver (liquidity) but real produce and labour capacity. And yet much present economic theory and practice is only so much neomerchantilism.

This makes me suspect a real foundation, at least psychologically, to the behaviour.

Authors set out to demonstrate qualitative cognitive differences between people suffering with scarcity (primarily cash) and those not.

People suffering with scarcity have a cognitive load that the 'not' category does not -- I don't think that translates to reduced IQ, but was demonstrated to translate to 'more bad decisions' via heightened and persistent cognitive load.

ADDENDA: From the outside looking in, that phenomenon may be misunderstood by an observer to indicate a causal relationship between bad decision making and poverty. TFA makes the case that causality is inverse to common (by governments, elites, etc) interpretation.