The “poor but neoclassical” approach treats poor people as utility-maximizing agents and focuses on the structural constraints that affect decision making as a consequence of reduced opportunities and incomplete information (Duflo Reference Duflo, Banerjee, Mookherjee and Benabou2006). Pepper & Nettle (P&N) offer an evolutionary take on this approach, arguing that a cluster of harmful behaviors linked to low socioeconomic status (SES) constitutes a “contextually appropriate response” to a perceived limited control and to a short life expectancy. In this comment, we substitute a different psychological explanation and argue that self-control rather than “extrinsic mortality risk” explains those behaviors. We propose that to be effective, interventions to guide disadvantaged populations should help participants develop a sense of competence and reduce the need for self-regulation.
We are in agreement with the authors' view regarding the impact of poverty, but we believe that many of their explanations about the mechanisms behind those behaviors are more readily explained by the well-established psychological construct of self-control and limited resources. For example, P&N argue that the actions of poor people are the outcome of environmental influences, which create a limited sense of control. However, wealthy people brought into a state of temporary deprivation have also exhibited myopia and made short-sighted decisions, regardless of their backgrounds or environments (Shah et al. Reference Shah, Mullainathan and Shafir2012). These findings are explained by the limited attention span brought about by financial scarcity. According to this approach, being in a state of scarcity shifts the attention of the individual to whatever is currently lacking. This focus creates a cognitive load and exacts a price – the poor often fail to plan properly, tend to make inferior decisions, and pay too much attention to minor issues while neglecting more substantial financial aspects of their lives (Mani et al. Reference Mani, Mullainathan, Shafir and Zhao2013; Mullainathan & Shafir Reference Mullainathan and Shafir2013; Shah et al. Reference Shah, Mullainathan and Shafir2012).
Whereas the outcome of the scarcity approach concurs with that of P&N's view on the impact of poverty, it points to a different type of mechanism. Instead of emphasizing ecological factors and life circumstances that affect self-efficacy, this approach highlights the depletion of cognitive and emotional resources due to shortage of money. Although we do not intend to belittle the importance of environmental factors, evidence shows that the relationship is not as straightforward as the authors propose. For example, we discovered that SES is a poorer predictor than income of the financial distress of participants in an economic recovery program (Carmel et al., submitted). Moreover, it has been shown that environmental change programs for low-income populations obtain limited success: They positively influence well-being but have only a meager effect on wealth and employment (Ludwig et al. Reference Ludwig, Duncan, Gennetian, Katz, Kessler, Kling and Sanbonmatsu2012).
The difference between a focus on limited “sense of control” and a focus on limited “self-control” is demonstrated by P&N's interpretation of extrinsic mortality risk. The authors suggest that “if people of lower SES feel that they are likely to be killed . . . it would make sense for them to invest less effort in looking after their health.” This suggestion hints at a hidden assumption that the poor operate in a way that maximizes their utility, framing the authors' approach as part of the “poor but ne-classical” tradition. To support their assumption, the authors present the relationship between life expectancy and several inadequate behaviors that characterize individuals from low SES (e.g., an unwillingness to wait for future payoffs, health-related issues). However, alternative psychological explanations do not entail such an assumption. For instance, Bernheim et al. (Reference Bernheim, Ray and Yeltekin2015) argue that poverty damages the ability to exercise self-control and can explain occurrences of harmful behaviors. Similarly, living in poverty demands trade-offs and permanent juggling between limited resources, resulting in a reduced ability to regulate behaviors (Loibl Reference Loibl and Ranyard2017; Vohs Reference Vohs2013). Those well-documented psychological explanations do not require the assumption of rationality. They acknowledge that vulnerable populations may be more subject to biases due to their stressful situations and obviate the idea that irresponsible behavior is a logical response to subjective expectations of life expectancy.
Finally, we would like to discuss the implications for interventions to help disadvantaged populations. We disagree with the authors' stress on extrinsic mortality, but we share their view regarding the importance of the locus of control. However, we consider it to be only the first step to recovery. Recently, we performed two independent intervention studies with marginalized populations who adopted the concept of mentoring to help their participants. The first was meant to evaluate the impact of a program among young immigrants. The program aims to reshape the lives of juvenile delinquents by offering them guidance, ongoing support, and personal attention. We found that the program managed to reduce recidivism by 17%, providing 10 times the return on investment (Spivak & Leiser Reference Spivak and Leiser2016). The second study evaluated the impact of a financial intervention program meant to help families in financial distress. The study revealed that the program had a robust and long-lasting positive impact on the participants' financial states (Carmel et al., submitted). Edelstein (Reference Edelstein2013), who has analyzed determinants of the achievements of the first program, concludes that sense of personal capability is a key ingredient to program success. Similarly, our assessment of the effectiveness of the financial program shows a positive relation between internal locus of control and the financial state of program graduates after 2 to 3 years. Interestingly, when asked about their difficulties, respondents in both studies mentioned self-control. Edelstein reports that the two main reasons for recidivism offered by past participants were temptations provided by their friends and environment and the lack of a supportive structure to help them fight those desires. Similarly, graduates of the financial intervention program mentioned that following the program's routine was a demanding task that they struggled to perform in the absence of the mentor. It appears that to make an impact, we should consider both factors – a sense of control to motivate people and a supportive environment to help them regulate their behavior.
The “poor but neoclassical” approach treats poor people as utility-maximizing agents and focuses on the structural constraints that affect decision making as a consequence of reduced opportunities and incomplete information (Duflo Reference Duflo, Banerjee, Mookherjee and Benabou2006). Pepper & Nettle (P&N) offer an evolutionary take on this approach, arguing that a cluster of harmful behaviors linked to low socioeconomic status (SES) constitutes a “contextually appropriate response” to a perceived limited control and to a short life expectancy. In this comment, we substitute a different psychological explanation and argue that self-control rather than “extrinsic mortality risk” explains those behaviors. We propose that to be effective, interventions to guide disadvantaged populations should help participants develop a sense of competence and reduce the need for self-regulation.
We are in agreement with the authors' view regarding the impact of poverty, but we believe that many of their explanations about the mechanisms behind those behaviors are more readily explained by the well-established psychological construct of self-control and limited resources. For example, P&N argue that the actions of poor people are the outcome of environmental influences, which create a limited sense of control. However, wealthy people brought into a state of temporary deprivation have also exhibited myopia and made short-sighted decisions, regardless of their backgrounds or environments (Shah et al. Reference Shah, Mullainathan and Shafir2012). These findings are explained by the limited attention span brought about by financial scarcity. According to this approach, being in a state of scarcity shifts the attention of the individual to whatever is currently lacking. This focus creates a cognitive load and exacts a price – the poor often fail to plan properly, tend to make inferior decisions, and pay too much attention to minor issues while neglecting more substantial financial aspects of their lives (Mani et al. Reference Mani, Mullainathan, Shafir and Zhao2013; Mullainathan & Shafir Reference Mullainathan and Shafir2013; Shah et al. Reference Shah, Mullainathan and Shafir2012).
Whereas the outcome of the scarcity approach concurs with that of P&N's view on the impact of poverty, it points to a different type of mechanism. Instead of emphasizing ecological factors and life circumstances that affect self-efficacy, this approach highlights the depletion of cognitive and emotional resources due to shortage of money. Although we do not intend to belittle the importance of environmental factors, evidence shows that the relationship is not as straightforward as the authors propose. For example, we discovered that SES is a poorer predictor than income of the financial distress of participants in an economic recovery program (Carmel et al., submitted). Moreover, it has been shown that environmental change programs for low-income populations obtain limited success: They positively influence well-being but have only a meager effect on wealth and employment (Ludwig et al. Reference Ludwig, Duncan, Gennetian, Katz, Kessler, Kling and Sanbonmatsu2012).
The difference between a focus on limited “sense of control” and a focus on limited “self-control” is demonstrated by P&N's interpretation of extrinsic mortality risk. The authors suggest that “if people of lower SES feel that they are likely to be killed . . . it would make sense for them to invest less effort in looking after their health.” This suggestion hints at a hidden assumption that the poor operate in a way that maximizes their utility, framing the authors' approach as part of the “poor but ne-classical” tradition. To support their assumption, the authors present the relationship between life expectancy and several inadequate behaviors that characterize individuals from low SES (e.g., an unwillingness to wait for future payoffs, health-related issues). However, alternative psychological explanations do not entail such an assumption. For instance, Bernheim et al. (Reference Bernheim, Ray and Yeltekin2015) argue that poverty damages the ability to exercise self-control and can explain occurrences of harmful behaviors. Similarly, living in poverty demands trade-offs and permanent juggling between limited resources, resulting in a reduced ability to regulate behaviors (Loibl Reference Loibl and Ranyard2017; Vohs Reference Vohs2013). Those well-documented psychological explanations do not require the assumption of rationality. They acknowledge that vulnerable populations may be more subject to biases due to their stressful situations and obviate the idea that irresponsible behavior is a logical response to subjective expectations of life expectancy.
Finally, we would like to discuss the implications for interventions to help disadvantaged populations. We disagree with the authors' stress on extrinsic mortality, but we share their view regarding the importance of the locus of control. However, we consider it to be only the first step to recovery. Recently, we performed two independent intervention studies with marginalized populations who adopted the concept of mentoring to help their participants. The first was meant to evaluate the impact of a program among young immigrants. The program aims to reshape the lives of juvenile delinquents by offering them guidance, ongoing support, and personal attention. We found that the program managed to reduce recidivism by 17%, providing 10 times the return on investment (Spivak & Leiser Reference Spivak and Leiser2016). The second study evaluated the impact of a financial intervention program meant to help families in financial distress. The study revealed that the program had a robust and long-lasting positive impact on the participants' financial states (Carmel et al., submitted). Edelstein (Reference Edelstein2013), who has analyzed determinants of the achievements of the first program, concludes that sense of personal capability is a key ingredient to program success. Similarly, our assessment of the effectiveness of the financial program shows a positive relation between internal locus of control and the financial state of program graduates after 2 to 3 years. Interestingly, when asked about their difficulties, respondents in both studies mentioned self-control. Edelstein reports that the two main reasons for recidivism offered by past participants were temptations provided by their friends and environment and the lack of a supportive structure to help them fight those desires. Similarly, graduates of the financial intervention program mentioned that following the program's routine was a demanding task that they struggled to perform in the absence of the mentor. It appears that to make an impact, we should consider both factors – a sense of control to motivate people and a supportive environment to help them regulate their behavior.