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    The Koyal Group Financial Economy Warning Articles on Researchers: Poverty Lowers IQ

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    A new study has found that the stresses of life in poverty leave people limited in their ability to solve problems and complete complex tasks. Researchers contributing to the new study “Poverty Impedes Cognitive Function,” published Friday in Science magazine, say that living in poverty is equivalent to losing 13 IQ points, losing an entire night’s sleep or suffering from alcoholism. The study provides further evidence that those living in poverty aren’t, as some suggest, lazy or less driven than those in the middle class, but struggle as a result of economic circumstances and stressful situations largely outside of their control.

    Anandi Mani, a research fellow who worked on the study, says that previous research indicates that poor people generally use less preventive health care, seldom stick to drug regimens, are more tardy and less likely to keep appointments, are less productive workers, and worse managers of their finances.

    Mani asked, “The question we therefore wanted to address is, is that a cause of poverty or a consequence of poverty?”

    To answer this question, a team of economists and psychologists based in the U.S. and the U.K. performed two experiments to see how groups of people of different financial backgrounds performed given varying stressful situations.

    The Guardian reports that in the first experiment, researchers approached 400 random people at a shopping mall in New Jersey, asking them to think about two different scenarios- an “easy” scenario that required them to think about a $150 car repair and a “hard” one that asked participants to think about how they would finance a $1,500 car repair. While they thought about these different scenarios, the volunteers were asked to take part in puzzle-based IQ tests and tasks that measured their attention.

    The researchers compared the change in performance in the tests for rich and poor people across the two situations, with rich and poor defined as being either side of the median U.S. household income of $70,000 per year.

    In the shopping mall experiment, rich and poor people performed equally well on the easy scenario, but outcomes differed considerably when it came to performance on the difficult car repair scenario. People from poorer economic backgrounds had an average IQ that was about 13 points lower when they were thinking about serious financial troubles.

    In the second study, the team studied IQ and attention tests for 464 sugar cane farmers in Tamil Nadu, India during times of relative wealth and poverty. Farmers in this region are generally in a more stable financial situation just after a sugar cane harvest, when they sell their crops and have an immediate cash flow.

    In the months leading up to another harvest, this money, their prime source of income wanes, often creating more stress on the farmers and their families.

    By looking at farmers’ performance in tests before and after cane harvests, researchers again found considerable differences in decision-making abilities.

    “What we did is look at the same people the month before and the month after the harvest, and what we see is that IQ goes up, cognitive control, or errors, goes way down, and response times go way down,” said Sendhil Mullainathan, a professor of economics at Harvard University and a co-author of the study.

    What does this all mean? For anti-poverty advocates, these findings provide further evidence that the so-called “culture of poverty” is a myth. That poor people don’t have a strong work ethic has been a popular explanation for why 50 million people live in poverty across the U.S. with millions more living on the edge of poverty. It appears conditions determine performance and attitude, not the other way around.

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