Thinking while poor

Adriene Hill of Marketplace Money on NPR talked to Sendhil Mullainathan of Harvard about his latest research. Lots of other research (not cited in the story) shows that poor people make poor decisions. The new research tried to show whether poor decision makers became poor or poverty made poor decision makers.

The research shows the second, that the poor spend so much energy fretting over money they don't have enough mental focus to properly think of much else. We compound the problem in America by demanding poor people to fill out complicated forms to receive assistance, demanding much of people we know have low focus.

The two responses to this story are interesting. The first challenges the researcher to define a bad decision. Is it simply a decision the researcher wouldn't make? What if all your choices are bad?

The second says don't call poor people stupid. It takes a lot of creativity and smarts to keep track of money so that life on less than $25K is possible.