 According to University of Pennsylvania economist Heather Schofield call “bandwidth,” or the capacity of the brain’s ability to perform basic functions that underlie both higher-order behavior and decision-making. When bandwidth is taxed, there’s less of it available for use in other judgments or decisions, leading to some potentially undesirable choices  Poverty may reduce the available cognitive bandwidth to the point where one’s ability to make better choices could be severely reduced.

1. Input of
Knowledge@Wharton
By
Col Mukteshwar Prasad(Retd)
Mental Bandwidth : The
Psychology Behind Poverty

2. Introduction
 Think about the last time you were really busy —
 maybe work was more stressful than usual,
 you had a sick kid/Parents
 No leave left to get out from office
 Office work pressure of end of Financial year/month end
production
 Didn’t things in your life start to slip through the cracks?
 Slippage at home and office
 According to University of Pennsylvania economist Heather
Schofield, that experience is a perfect example of what she
and fellow researchers call “bandwidth,” or the capacity
of the brain’s ability to perform basic functions that
underlie both higher-order behavior and decision-
making.
 When bandwidth is taxed, there’s less of it available for
use in other judgments or decisions, leading to some
potentially undesirable choices

3. Introduction
 In her recent paper, “The Psychological Lives of the Poor,” Schofield, and
her co-authors — economists Frank Schilbach of the Massachusetts Institute
of Technology and Sendhil Mullainathan of Harvard University — reviewed
research on bandwidth and how it may affect the psychology behind poverty.
 Specifically, Schofield says, they posit that poverty may reduce the
available cognitive bandwidth to the point where one’s ability to make
better choices could be severely reduced.
 In other words, Schofield says, people in poverty may not be making bad
choices because they are somehow different from those who are more
affluent.
 They just may lack the bandwidth necessary to make good ones.
 “There are often stereotypes of people who make bad choices, and
we’re really trying to understand what’s driving that. Is it the person or
their circumstances?” she said.
 “They may have all the baseline capacity, but there’s a greater tax on
bandwidth because of their poverty. There’s just less of a scope to
allow them to make good choices.”

4. A Two-system Model
 According to the paper, the brain operates on a two-system model:
 System 1 is the intuitive, automatic and effortless portion, which is prone
to biases and errors;
 System 2 can produce accurate and unbiased results but is slower, more
effortful and deliberate.
 Increased bandwidth makes it less likely that a person can use their
System 2 brain processes when making decisions, leaving it up to
the more reactionary System 1 to do the heavy lifting.
 Both systems are “scare resources, the taxing of which causes negative
spillovers to other aspects of cognitive functioning,”.
 Those spillovers include effects on
 decision-making,
 productivity and
 utility.
 In addition, effects may vary depending on the aspects of bandwidth which
are impacted.
 “Your attention [can be] strong, but your ability to reason [can be]
weak. There’s not a perfect one-to-one association,” Schofield notes.
 “There’s more to be done on the measurement side on how these
factors change and how well-correlated they are.”

5. A Two-system Model
 A reduction in Bandwidth can be measured when factors associated
with poverty — nutrition, alcohol and monetary concerns — are
considered,
 For example, earlier research by Schofield found evidence from an
experiment in which rickshaw drivers in India with low body-mass indices
performed a series of tasks.
 In one, subjects searched through a grid for a specific set of symbols;
 the task required mental stamina, making it a natural measure of the effect
of poor nutrition on bandwidth.
 Those rickshaw drivers who were randomly assigned to have higher caloric
intake showed an almost immediate 12% improvement in performance on
such tasks, a gain that was sustained by the end of the experiment.
 Other data show similar effects when manipulating alcohol intake and
monetary concerns,
 the latter of which covers both having less money to buy things but also
spending more of one’s bandwidth managing that money,.
 “Even when the poor are not actually making financial decisions, these
preoccupations can be distracting. Thinking and fretting about money
can effectively tax bandwidth,”

6. A Two-system Model
 Schofield says other factors associated with poverty, such as air pollution,
sleep deprivation and chronic pain, are well worth studying to determine the
depth of the connection between poverty and bandwidth and how the two
can influence each other.
 “I think there’s a strong possibility of some sort of feedback loop,” she
says. “If you start out poor and there’s a tax on your bandwidth capacity
as well, then it means you have less money to spend to address the
environmental factors that are driving those choices. It has the
potential for a vicious cycle.”
 Schofield’s work is part of a deepening study of the psychological world of
the poor, from collecting better financial data on poverty to increased
behavioral economic studies and trying to ascertain what factors drive which
outcomes.
 Further examination in those studies and more examination of bandwidth
could lead to a better understanding of poverty and a separation of ill-formed
assumptions from conclusions backed by solid data, Schofield says.
 “There’s certainly some interest and some movement to think about
these aspects of poverty and how to influence the downstream
decisions we care about,” she notes. “There’s a lot to think about both
from a policy angle and an academic perspective.”