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The psychology of poverty

Theories about poverty often fall into two general categories: that the behaviors of poor people reflect the best choices they can make in unfavorable circumstances, and, alternatively, that these behaviors are a result of a unique ‘culture of poverty’ based on deviant values. The first view presumes that people are highly rational, hold coherent and well-informed beliefs, and pursue their goals effectively with no need for help. The second view attributes to the poor a variety of shortcomings that make them misguided, uninformed, impulsive, and in need of paternalistic guidance in order to make reasonable choices. While there is no doubt that people—the poor included—are at times methodical and calculating, and at other times fallible or misguided, a third, alternate theory takes a different tack and is informed by recent behavioral research. According to this view, scarcity experienced as a result of economic instability and poverty reduces already limited cognitive resources, resulting in detrimental behaviors and ineffective decision-making.


Economic Support, Financial Security, Social Insurance Programs