Scarcity: Why Having Too Little Means So Much

by Sendhil Mullainathan

If the child hadn’t eaten the marshmallow before the researcher returned, he would get a second marshmallow. The children were faced with one of the oldest problems known to man, what the social scientist Thomas Schelling calls “the intimate contest for self-command,” the problem of self-control.

Rewards in the distant future (two marshmallows later) are less salient and thus receive lower weight. So when we think about one versus two marshmallows in the abstract future, two is better than one. But when one marshmallow is right in front of us now, it suddenly beats two.

Self-control relies heavily on executive control. We use executive control to direct attention, initiate an action, inhibit an intuitive response, or resist an impulse.

The children

who were most successful in resisting the marshmallow temptation did so by focusing their attention elsewhere. Instead of looking at and thinking about the marshmallow, they thought about other things.

As Mischel put it, “Once you realize that willpower is just a matter of learning how to control your attention and thoughts, y...

Those whose minds were not terribly occupied by the two-digit number chose the fruit most of the time.

Those whose minds were 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, like rehearsing digits, we have less capacity to prev...

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.

And because scarcity taxes bandwidth, this suggests that scarcity not only can lower fluid intelligence but can also reduce self-control.

A small tickle of scarcity and they were suddenly more impulsive. Beyond fluid intelligence, scarcity appears to reduce executive control.

The same farmer fared worse on fluid intelligence and executive control when he was poor (preharvest) than when he was rich (postharvest).

Poverty itself taxes the mind. Even without an experimenter around to remind us of scarcity, poverty reduces fluid intelligence and executive control.

We would argue that the poor do have lower effective capacity than those who are well off. This is not because they are less capable, but rather because part of their mind is captured by scarcity.

We all understand that dieting can be hard: resisting tasty foods can be difficult for all of us. The bandwidth tax, however, suggests that dieting is more than hard. It is mentally taxing.

Across a variety of cognitive tests, they find that people simply perform worse when they are dieting. And when psychologists interview the respondents, they find a common pattern: concerns related to dieting are top of mind for these dieters and interfere with their performance.

Furthermore, direct physiological measures show that nutritional deficiencies do not cause these cognitive impairments.

This test relies on an interesting fact about the brain: brain lateralization. Most people are right-ear dominant for language, which means that verbal information presented to the right ear is easier for them to attend to.

In contrast,

focusing on the nondominant ear—the left ear—requires bandwidth. It requires executive control to override the natural proclivity to focus on the right and instead to attend to the left.

Finally, in a study looking at impulse control, when subjects who anticipated being lonely were given the opportunity to taste chocolate-chip cookies, they ate roughly twice as many. Consistent with this, research on the diets of older adults has found that those who feel lonely in their daily lives have a substantially higher consumption of fatty foods.

Scarcity, by its nature, is a clustering of several important concerns. Unlike a marital spat that can happen anywhere and to anyone, preoccupations with money and with time cluster around the poor and the busy, and they rarely let go. The poor must contend with persistent monetary concerns. The busy must contend with persistent time concerns. Scarcity predictably creates an additional load on top of all their other concerns.

But whereas only some people who experience abundance will be preoccupied, everyone experiencing scarcity will be preoccupied.

Stress, in contrast, does not have these predictable effects. Some studies find that stress heightens working memory. Still other studies have found mixed evidence, including some indication that executive control might improve during periods of stress.

Finally, to think of all of this as stress and worry misses a deeper point. The bandwidth tax is not a finding in isolation. It emerges from the same core mechanism as the focus dividend or the way tunneling shapes our choices.

The bandwidth tax changes us in surprising and powerful ways. It is not merely its presence but also its magnitude that is surprising.

The size of these effects suggests a substantial influence of the bandwidth tax on a full array of behaviors, even those like patience, tolerance, attention, and dedication that usually fall under the umbrella of “personality” or “talent.”

But these people are not unskilled or uncaring, just heavily taxed. The problem is not the person but the context of scarcity.

What a slow computer, you might think, confusing the processor loaded down by other tasks for one that is inherently slow. Similarly, it is easy to confuse a mind loaded by scarcity for one that is inherently less capable.

Unlike the manager, we are emphatically not saying that poor people have less bandwidth. Quite the opposite. We are saying that all people, if they were poor, would have less effective bandwidth.

Scarcity doesn’t just lead us to overborrow or to fail to invest. It leaves us handicapped in other aspects of our lives. It makes us dumber. It makes us more impulsive.

Packing the small suitcase forces trade-offs.

Both suitcases require a choice of what to pack and what to leave out. Yet psychologically only the small suitcase really feels like a problem. The large suitcase is packed casually. The small suitcase is packed carefully and intently.

We have a time suitcase that must fit our work, leisure, and family time. We have a money suitcase into which we must fit our housing, clothing, and all our expenses.

As this metaphor illustrates, when scarcity focuses us, it also changes how we pack. It changes how we manage each dollar, each hour, or each calorie. It also leaves us with differently packed suitcases. The big suitcase is packed carelessly, with room to spare. The small suitcase is packed carefully and tightly.

There is one question you don’t ask yourself: “If I buy this drink, what will I not buy instead?” You do not ask this question because it almost seems silly.

Many of us make $10 purchases as if there are no trade-offs. We do not have to sacrifice some other purchase just to make this one.

We recognize that having one thing means not having something else. We engage in what we call trade-off thinking.

Scarcity forces trade-off thinking. All those unmet needs capture our attention and become top of mind.

paid. So when we consider buying something else, all the bills are there, making the trade-off apparent. When we are working on a tight deadline, all the things we must get done are foremost on our mind. So when we think about spending an hour on anything else, the trade-offs again are salient.

By this account, trade-off thinking is an inherent conseq...

Whether or not we think about trade-offs depends on the size of the item relative to our budget.

We call this space slack—the part of our budget that is left untapped because of the way we pack. It is typical of large suitcases. Slack is a consequence of not having the scarcity mindset when we pack with room to spare, of a particular approach to managing resources when we experience abundance.

Slack is what allows us to feel there is no trade-off.

Many people enjoy slack in money as well. One study showed that high-income shoppers are twice as likely to report that they do not track their spending because they “don’t have to; [they] make enough money.”

We, however, do not use slack to refer to the sort of room deliberately created to deal with the unexpected, the kind that’s actually carefully budgeted.

But notice, that’s intended slack, the kind you allocate carefully, as you would for any other item.

The exchange rate is steep: each pound of wax requires eight pounds of honey, which requires more than ninety thousand individual bee trips to collect nectar from flowers.

Why do bees create such precise structures and the wasps such messy ones? Scarcity. The wasps build with material that is abundant: mud. The bees build with material that is scarce: wax.