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How poverty affects people’s decision-making processes

As poverty continues to be a persistent feature of the social and economic landscape in the United Kingdom, attention is increasingly turning towards the potentially damaging role played by individual decisions made in low-income contexts. Stereotypes propagated in public opinion, media representations, and even political discourse, often depict those on the lowest incomes or in receipt of government benefits as people apparently making little effort to improve their socioeconomic condition. Emerging research from academic social science and behaviourally focused government bodies is beginning to replace this set of assumptions regarding decision-making in poverty with robust evidence. This report summarises the most recent research on this topic, with a focus on the influence of poverty and low socioeconomic status (SES) on the psychological, social and cultural processes that underpin decisionmaking in a range of settings.

An approach to understanding decision-making in poverty

Being in poverty means living without enough resources – both money and education – to meet one’s needs and to participate fully in society. It is also usually accompanied by unreliability in the availability of food, shelter and employment, and instability in one’s environment, both of which are experienced as stressful. Such a constrained decision-making context triggers changes in the functioning of key psychological, social and cultural processes. This project studied such processes as intermediary mechanisms through which low SES might influence decision-making in a range of domains. By focusing on a core set of underlying mechanisms underpinning decision-making, it offers insight into why observed behavioural patterns are taking place, and thus how to address them in the most effective and widely applicable manner.

Decision-making can also be understood in terms of underlying patterns, in terms of whether they serve immediate or more distant goals. Specifically, many of the suboptimal decisions and behaviours associated with low-income groups are characterised by a preferential focus on the present (as opposed to the future), on the actual (as opposed to the hypothetical), on those socially close (as opposed to those socially distant), and on the ‘here’ (as opposed to places far away). Whereas some decisions might have harmful distal consequences, such as the influence of unhealthy eating on health in older age, they often perform important proximal functions, such as providing immediate comfort or a sense of social connectedness. This report thus proposes recasting decision-making patterns associated with contexts of poverty from being suboptimal or resulting from psychosocial deficits, to being rational or adaptive when considered in terms of the proximal functions they serve. In doing so, it offers a more nuanced understanding of the behavioural dimension of poverty than has previously been available, and charts a path for more sustainable interventions than have yet been attempted.