At first blush, there is little in common between a Harvard economics professor who’s very busy and a poor person from India, struggling to simply put food on the table. But according to Sendhil Mullainathan, the Harvard economist, what they have in common is an idea: Of scarcity.
“Both of us are touching on the exact same psychology,” Mullainathan says. “There is actually something primitive that happens to the human brain when experiencing very little.”
In a book he’s written, with Eldar Shafir, about this topic, called “Scarcity: Why Having Too Little Means So Much,” Mullainathan says that scarcity can focus the mind.
“Everyone has had the experience of two weeks left to do something, and you doddle,” he adds. “One day left to do something, wow, you are focused.”
He says this same focus applies to people with limited money.
“They become incredibly focused on every little dollar, every little penny,” he says.
Mullainathan says, that scarcity doesn’t always work to focus the mind sometimes it leaves people thinking about time and money even when they don’t want to. He calls this the “bandwidth tax.” He gives an example of a person who is procrastinating on work to go to their child’s softball game.
“They’re at the game, but they’re not mentally at the game,” he says.
The stress that situation creates, the load, that’s the bandwidth tax. He says this is where the rich and busy and poor differ.
“The busy can take a vacation, the poor unfortuantely cannot say ‘I’ve had it with being poor, I’ll take a week of being rich,'” he says.
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