The Psychology of Poverty: A Replication Based on Zimbabwe's Harmonised Social Cash Transfer Programme

Abstract

We perform a scientific replication of a recent paper in this journal that reports evidence from Malawi that an unconditional cash transfer programme affects psychological states, such as life satisfaction and subjective well-being, as well as economic decisions involving intertemporal choice. Using data from Zimbabwe, we find similar results. Together, these two studies are the first from outside a laboratory setting that support the idea that poverty can have psychological effects that in turn influence intertemporal choice in a way that perpetuates poverty. These results, if found to hold in diverse settings, open up the policy space for a broader range of interventions that could reduce the number of people living in poverty. As this is a relatively new idea in economics with important policy implications, replicating these results in other settings is important before they can be widely generalised.

Mental Bandwidth is Associated with HIV and Viral Suppression Among Low-Income Women in Philadelphia

“…21 In contrast, alleviating scarcity through poverty alleviation has been shown to increase bandwidth and decrease discounting. 16,22 Whether poverty alleviation's effects on mental bandwidth and future discounting translates into changes in future-oriented health behaviors remains an open question. While this growing economics literature has focused on the effects of poverty on these psychological decision-making factors, our study is among the first to evaluate associations between these factors and a specific context like HIV within which poverty is a highly important determinant of outcomes.…”

“…[12][13][14][15][16][17][18][19][20][21] This may occur through decreases in mental bandwidth (the mental resources available at a given time to make complex decisions), increases in future discounting (the tendency to undervalue future outcomes), and increases in risk aversion. 15,16,[19][20][21][22][23][24] While the association between poverty and these psychological decision-making processes has been recently established, it is plausible that these processes are even further impaired in the context of HIV or pregnancy. If this were the case, it would suggest that anti-poverty interventions could be particularly beneficial to improve health behaviors in these populations.…”