Scarcity: Why Having Too Little Means So Much

by Sendhil Mullainathan

For the busy, this means burdened and contorted schedules of the kind we talked about in the opening chapter, with “near toppling” piles of to-dos and double-booked appointments. For the poor, it means complicated financial lives. Detailed research in the fascinating book Portfolios of the Poor shows that the poor use about ten distinct financial instruments on average. In Bangladesh one instrument—a short-term interest-free loan—was used more than three hundred times by forty-two households in one year. At any point in time, the poor in these surveys owed and were owed money from numerous sources, a patchwork that was created through months and even years of tunneling on the moment’s most pressing problem.