After reading the attached article on scarcity (File below), write an essay with at least a minimum of 700 words and not to exceed a maximum of 1,000 words about how COVID 19 and scarcity have affected what the author describes as your “bandwidth.” Specifically, write about how COVID 19 and scarcity have affected your educational goals and career aspirations.
For example, approximately 21 million jobs have been lost and that number is going to increase. The unemployment rate is projected to increase to 20 percent and probably more. Some economists speculate 1/3 or more Americans who were laid off are not looking for work and consequently not counted as unemployed. The highest rate of US unemployment was 24.9 percent in 1933 during the great depression. This is definitely a rough time to be graduating from universities in terms of entering the job market and beginning new careers.
When you are writing your essay, please write about your experiences during this time of COVID-19, how you are being impacted and how this is effecting your educational goals and career objectives. Please do not forget to include the five economic concepts below in your essay.
As the instructor I should be able to determine that you have read the article and understand the content by incorporating the following five concepts with definitions and examples:
1.Economic decision rule
2.Opportunity costs
3.Scarcity
4.Invisible forces
5.Macroeconomics or the macro economy
58 S C I E N T I F I C A M E R I C A N M I N D J a n u a r y/ F e b r u a r y 2 0 1 4
I
magine sitting in an of� ce located near the railroad tracks.
Trains rattle by several times an hour. As you try to concentrate,
the rumble of every train pulls you away from what you are do-
ing. You need time to refocus, to collect your thoughts. Worse,
just when you have settled back in, another train hurtles by.
This description mirrors the conditions of a school in New Ha-
ven located next to a noisy railroad line. In the early 1970s two re-
searchers decided to measure the impact of this noise on students.
They noted that only one side of the school faced the tracks, so the
students in classrooms on that side were particularly exposed to
the noise but were otherwise similar to their fellow students.
Adapted from Scarcity: Why Having Too Little Means So Much,
by Sendhil Mullainathan and Eldar Sha� r, by arrangement with
Times Books, an imprint of Henry Holt and Company, LLC
(North America), and Allen Lane (UK). Copyright © 2013 by
Sendhil Mullainathan and Eldar Sha� r. All rights reserved.
A preoccupation with scarcity diminishes IQ and self-control.
Simple measures can help us counteract this cognitive tax
By Sendhil Mullainathan and Eldar Sha� r
ILLUSTRATION BY STUART BRIERS
I N T E L L I G E N C E
FREEING
UP
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i n t e l l i g e n c e
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60 s c i e n t i f i c a m e r i c a n m i n d J a n u a r y/ f e b r u a r y 2 0 1 4
They found a striking difference between the
two sides of the school. Sixth graders on the train
side were a full year behind their counterparts on the
quieter side. Prompted by this study, the city in-
stalled noise padding. This intervention erased the
difference, the researchers found: students on both
sides of the building now performed at the same
level. These results mirror many laboratory studies
that have documented the powerful effects of even
slight distraction.
Now picture yourself working in a pleasant,
quiet office: no disruptions, no trains. Instead you
are struggling with your mortgage and the fact that
freelance work is hard to come by. Your spouse and
you are living a two-earner life with only one-and-
a-quarter earners. You sit down to focus on your
work. Soon your mind is wandering. Should we sell
the second car? Should we take out another loan?
These noisy trains of thought are every bit as hard
to ignore. Although the room seems quiet, it is full
of disruptions— ones that come from within.
Such internal disruptions stem from scarcity.
An unrealized need can capture our attention and
impede our ability to focus on other things. Scarci-
ty in one walk of life means we have less attention,
“less mind,” in the rest of life. The concept of less
mind is well studied by psychologists. Although
careful research in psychology employs several fine
distinctions to capture this idea, we use the single
umbrella term “bandwidth” to cover them all.
Bandwidth refers to our cognitive capacity and our
ability to pay attention, make good decisions, stick
with our plans and resist temptations. It correlates
with intelligence and SAT performance, impulse
control and success on diets. Scarcity creates a pow-
erful goal— dealing with pressing needs—that in-
hibits other considerations. We argue that by con-
stantly drawing us back to that urgent unmet goal,
scarcity taxes our bandwidth and our most funda-
mental capacities.
Bandwidth Blue
s
We use the term “bandwidth” to refer to two
broad, related components of mental function. The
first might be referred to as cognitive capacity, the
psychological mechanisms that underlie our ability
to solve problems, retain information, engage in log-
ical reasoning, and so on. Perhaps the most promi-
nent in this category is fluid intelligence, the ability
to think and reason abstractly and solve problems.
The second is executive control, which underlies our
ability to manage our cognitive activities, including
planning, attention, and initiating and inhibiting ac-
tions. Cognitive capacity and executive control are
multifaceted. And scarcity affects both.
A prominent and universally accepted measure
of fluid intelligence is the Raven’s Progressive Ma-
trices test, named after British psychologist John
Raven, who developed it in the 1930s. With our
graduate student Jiaying Zhao, we used this test to
observe the effect of scarcity on the fluid intelli-
gence of people in a New Jersey mall. First, half the
subjects were presented with simple hypothetical
scenarios, such as this one:
Imagine that your car has some trouble,
which requires a $300 service. Your auto in-
surance will cover half the cost. You need to
decide whether to go ahead and get the car
fixed or to take a chance and hope that it
lasts for a while longer. How would you go
about making such a decision? Financially,
would it be an easy or a difficult decision for
you to make?
We then gave them a series of Raven’s matrices
problems. Using self-reported household income,
we divided subjects into rich and poor.
For the remaining subjects, we ran the same
study with a slight twist—we made the service cost
$3,000 rather than $300. Remarkably, this change
affected the two groups differently. Coming up with
half of $300 or $3,000 was easy for those who were
well-off. They could just pay out of savings or put it
on a credit card. For the less well-off, finding $150
for an important need was not too hard either.
Not so for the $3,000 car expense: finding
$1,500 would be harder for those with low in-
FAST FACTS
A ScArcity Mind-Set
An involuntary preoccupation with an unmet need, such
as a shortage of money or time, can capture our atten-
tion and impede our ability to focus on other things.
A fixation on scarcity taxes our cognitive capacity and
executive control, thus diminishing intelligence and
impulse control, among other things.
We can free up cognitive bandwidth by converting
recurring demands into one-time actions.
noiSy TrAinS oF ThoughT Are
hArd To ignore. AlThough
The room SeemS quieT, iT iS
full of disruptions—oneS
ThAT Come From WiThin.
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t
h
in
k
S
t
o
c
k
comes. A 2011 study found that close to half of all
Americans reported that they would be unable to
come up with $2,000 in 30 days even if they really
needed it. Of course, the question we gave the mall
respondents was hypothetical. But it was realistic,
and it very likely got them thinking about their own
financial concerns. They may not have a broken car,
but experiencing money scarcity would mean they
had monetary issues close to the top of mind. Once
we tickled that part of the brain, the all too real
nonhypothetical thinking about scarcity would
come spilling out.
And this mental racket affected performance.
The better-off subjects, with no distractions, did
just as well here as if they had seen the easy scenar-
io. The poorer subjects, on the other hand, did sig-
nificantly worse. Preoccupied by scarcity, they had
lower fluid intelligence scores.
In our numerous replications of this study, the
effects have been consistent and big. To understand
the size of these effects, consider the impact of sleep
deprivation on performance on Raven’s matrices. In
one study, a group of subjects went to bed at a nor-
mal time. Another group was forced to stay awake
all night. The next morning all the subjects were giv-
en a Raven’s test. Not surprisingly, those deprived of
sleep did much worse. By comparison, our effect at
the mall was even bigger.
Another way to understand the size of our find-
ings is in terms of IQ. Because the Raven’s test is
used to measure fluid intelligence, it has a direct an-
alogue with IQ. Our effects correspond to between
13 and 14 IQ points. A gain of that many points can
lift you from the category of “average” to “superi-
or” intelligence. Or, if you move in the other direc-
tion, losing 13 points can take you from “average”
to a category labeled “borderline-deficient.” In our
studies, the same person has fewer IQ points when
he or she is preoccupied by scarcity than when not.
This cognitive penalty is the key to our story.
The second component of bandwidth is executive
control, a kind of central processor for the brain.
One of the many important functions to which it
contributes is self-control. Because executive control
helps to direct attention and modulate impulses, re-
duced executive function will hamper self-control.
A number of experiments have vividly illustrat-
ed this connection. One such study gave subjects a
memory task. Some people were asked to remember
a two-digit number; others were given a seven-digit
figure. The subjects were then led to a lobby to wait
for further testing. In front of them in the waiting
area were slices of cake and fruit. The real test was
which food they would select while rehearsing
those numbers in their head. The subjects with the
two-digit number chose the fruit most of the time.
Those whose mind was busy rehearsing the seven-
digit number chose the cake 50 percent more often.
The cake is the impulsive choice. When our mental
bandwidth is used on something else, such as re-
hearsing digits, we have less capacity to prevent
ourselves from eating cake.
In another study, white Australian students
were served food, but in this case it was something
they found disgusting: a chicken foot cooked in a
Chinese style that preserved the entire foot intact,
claws included. The dish was served by a Chinese
experimenter, creating some pressure to act civi-
lized. As in the cake study, some subjects’ minds
were loaded: they were asked to remember an eight-
digit number. Those whose mind was not taxed
managed to maintain composure, keeping their
thoughts to themselves. The cognitively loaded sub-
jects did not. They were more likely to blurt out
rude comments, such as “This is bloody revolting,”
despite their best intentions. Whether it is eating
cake we would rather resist or saying things we do
not mean to say, a tax on bandwidth makes it hard-
er for us to control our impulses.
To explore whether scarcity reduces executive
control, we returned to the mall in New Jersey. We
The AuThors
SENDHIL MULLAINATHAN, a professor of economics at
harvard university, is a recipient of a MacArthur Foundation
“genius grant” and conducts research in behavioral eco
nomics and development economics. ELDAR SHAFIR is
William stewart Tod Professor of Psychology and Public
Affairs at Princeton university. he conducts research in
cognitive science, judgment and decision making, and
behavioral economics.
recurring distractions
can substantially
diminish intelligence,
thereby affecting
performance at
school and on the job.
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62 s c i e n t i f i c a m e r i c a n m i n d J a n u a r y/ f e b r u a r y 2 0 1 4
g
e
t
t
y
i
m
a
g
e
s
repeated our earlier design—with the hypothetical
financial scenarios—but then tested our participants
on their impulse control rather than fluid intelli-
gence. The results were the same. After the finan-
cially easy questions, the poor and the well-off
looked similar. Yet the financially hard questions
made our poorer subjects significantly more impul-
sive, whereas the well-off subjects were unaffected.
scarcity in the field
These experiments tested our hypothesis. Our
interest, though, is in people’s everyday lives outside
the confines of an experiment. Around this time, we
were doing fieldwork on farming in India with
economist Anandi Mani of the University of War-
wick in England, and we noticed something inter-
esting. Farmers get their income in a big lump, all
at once at harvest time. This system means the
farmer has a very different financial life from most
workers, who get paid regularly.
Now picture a farmer who gets paid in June.
The next few months are quite good. Yet even if he
is prudent and tries hard to smooth his spending
during this period, by the time the following April
or May rolls around, he will be tight on cash. So the
same farmer is rich in the months after harvest and
poor in the months before harvest.
This was quite close to what we needed: we
could examine the same farmers’ bandwidth in the
months before harvest and after harvest. Instead of
comparing rich and poor people, we would see how
the same person’s behavior might vary when tight
on money and when flush with cash. But there was
one wrinkle. Might not harvest months impose dif-
ferent obligations than ordinary months did? For
example, festivals and weddings are common dur-
ing harvest months— exactly because people are
cash-rich. So instead of seeing the effects of scar-
city, we might just see the effects of celebrations.
To get around this, we used sugarcane farming,
which has a peculiar feature. Sugarcane requires an
enormous factory to crush the cane and extract the
juice (which, once evaporated, forms sugar). The
factories can process only so much, and the crop
cannot sit for long after harvesting. So sugarcane is
harvested during a four- to five-month window.
Neighboring plots are often on very different har-
vest cycles. One farmer may be in the process of har-
vesting, whereas a neighbor might have sold his crop
several months earlier. This rather obscure fact gave
us the break we needed. We could now study the
same farmers when they are poor and rich and know
that there is nothing specific about the preharvest
and postharvest months.
As we expected, the data showed that the farm-
ers were more financially strapped preharvest. In
the month before harvest, 78 percent of them had
pawned something (and 99 percent took some kind
of loan), but in the month after harvest only 4 per-
cent pawned something (and only 13 percent took
any kind of loan). Before harvest, they were also 11
percent more likely to report having trouble coping
with ordinary bills.
We again measured fluid intelligence and exec-
utive control. We gave the farmers a Raven’s matri-
ces task, and for executive control we chose the
Stroop task. In this task, subjects see strings of
items, such as A F F F, and must quickly say how
many items are in the string. When you see 2 2 2 2,
quickly saying “four” is quite hard. We found that
farmers performed much worse on both these tests
before harvest than after harvest. Much like our
subjects in the mall, the same person looked less in-
telligent and more impulsive when he was poor. Yet
in this case, it was not us who triggered scarcity-
related thoughts or even tried to bring them to the
surface—those thoughts were there naturally.
Again the magnitudes were large. The posthar-
vest farmers got about 25 percent more items cor-
rect on a Raven’s test. Put in IQ terms, this percent-
a parent preoccu-
pied with work may
appear to be an
unskilled caregiver,
yet that person’s
cognitive bandwidth
may simply be
heavily taxed.
whether it is eating cake
we would rather resist
or saying things we
do not mean to say,
a tax on bandwidth makes
it harder for us to
control our impulses.
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h
in
k
S
t
o
c
k
age corresponds with about nine or 10 IQ points. It
is not as big a gap as in the mall, but that is to be ex-
pected. After all, here we had not induced them to
think about money. We simply measured their men-
tal state at an arbitrary point. On the executive-
control task, they were 11 percent slower in re-
sponding and made 15 percent more errors while
poor, quite comparable to the mall study.
Returning to where we started, we see that the
results suggest a major twist in the debate over the
cognitive capacity of the poor. We would argue
that the poor do have lower effective capacity than
those who are well-off. Not because they are less
capable but rather because part of their mind is
captured by scarcity.
Give Yourself a Break
Tight finances are just one kind of scarcity;
dieting is another. Across a variety of cognitive
tests, psychologists find that people simply perform
worse when they are dieting. And when they inter-
view the respondents, they find a common pattern:
concerns related to dieting are top of the mind for
these dieters and interfere with their performance.
Other research has identified a similar effect from
loneliness—a social form of scarcity.
What, then, is so special about scarcity? Scarci-
ty is a clustering of several important concerns. Un-
like a marital spat that can happen anywhere and
to anyone, preoccupations with money and time
cluster around the poor and the busy, and they per-
sist. Whereas only some people who experience
abundance will be preoccupied, everyone experi-
encing scarcity will fixate on their state.
The size of these effects suggests the bandwidth
tax has a substantial influence on a full array of be-
haviors, even those such as patience, tolerance, at-
tention and dedication, that usually fall under the
umbrella of personality or talent. When she snaps at
her daughter, the harried sales manager looks like a
bad parent. The financially strapped student who
misses some easy questions on a test looks incapable
or lazy. Yet these people are not unskilled or uncar-
ing, just heavily taxed. The problem is not the per-
son but the context of scarcity.
The deeper lesson is the need to focus on man-
aging and cultivating bandwidth, despite pressures
to the contrary brought on by scarcity. Increasing
work hours, working people harder, forgoing vaca-
tions, and so on are all tunneling responses, as is
borrowing at high interest. They ignore the long-
term consequences. Psychiatrists report an increas-
ing numbers of patients who show symptoms of
acute stress: “stretched to their limits and beyond,
with no margin, no room in their lives for rest, re-
laxation and reflection.”
There is nothing magical about working 40 or
50 or 60 hours a week. But there is something im-
portant about letting your mind out for a jog—to
maximize bandwidth rather than hours worked. M
Further reading
■ Distracted and Confused?: Selective Attention under
Load. nilli Lavie in Trends in Cognitive Sciences, Vol. 9,
no. 2, pages 75–82; February 1, 2005.
■ “That Is Bloody Revolting!”: Inhibitory Control of
Thoughts Better Left Unsaid. W. von hippel and
K. gonsalkorale in Psychological Science, Vol. 16,
no. 7, pages 497–500; July 2005.
■ Some Consequences of Having Too Little. a. K. Shah,
S. Mullainathan and e. Shafir in Science, Vol. 338,
pages 682–685; november 2, 2012.
■ Poverty Impedes Cognitive Function. a. Mani,
S. Mullainathan, e. Shafir and J. Zhao in Science,
Vol. 341, pages 976–980; august 30, 2013.
From Our Archives
■ Building Better Brains. John Jonides et al.; September/
October 2012.
■ Treating a Toxin to Learning. Clancy Blair; September/
October 2012.
TIPS FoR MAnAgIng SCARCITy
Convert tasks that demand constant vigilance
into one-time actions.
Finances: enroll in an employer’s
401(k) plan so that saving for the
future becomes automatic. Sign up
for automatic bill payment.
Exercise: Set up appointments with
a personal trainer or friend to work out
together or make a bet with a friend.
these measures raise the stakes
of sticking with your exercise plan.
Work: Schedule breaks for walks and
stick to a regular bedtime. Sacrificing
health to put in longer hours takes a toll
on us mentally, physically and emotion-
ally, which diminishes performance.
Family time: Sign up for a weekly
activity together, to ensure that even
at your busiest you have quality time
once a week.
Food: Knowing that stress compels us to
make unhealthy choices, plan ahead for
tough times by stocking your pantry with
nutritious items. Being health-conscious
while shopping rather than at every
meal frees up cognitive bandwidth.
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