Sunday, September 1, 2013

Does a lack of money make you less intelligent? Financial worries reduce measured IQ (problem-solving ability)

This story has been getting a lot of press  -- mainly because there is very little that has any permanent impact on the IQ you are born with.  The point to note however is that the effect below is temporary, and the direction is down, not up.

It is precisely because psychologists have long been aware of the potential negative effect of extraneous factors on test performance that they do their best to exclude all distractions during test-taking, with testing normally being done under formal examination conditions. So the authors below have to a degree rediscovered the wheel.  That any task will be performed poorly if your mind is elsewhere is no surprise.

The interesting finding, though, is that money worries have a negative  effect only when they are very salient.  Test performance is not affected under normal conditions where such matters are in the background. 

That does confirm something I have myself noticed in many years of observing poor people:  They worry too little.  Their poor circumstances rarely seem to motivate them to efforts at bettering those circumstances.  They tend to be happy living from day to day.  They  often seem happier than many middle-class people.  That they have nothing in the bank is just accepted as normal and of no real concern.

The superficial message in the article is that giving the poor more money will make them smarter but there is no evidence for that and the findings actually contradict it.  What is in fact shown is that the problem solving ability of the poor is temporarily reduced when they are preoccupied by other things:   Quite unsurprising.  It has no implications for their basic underlying problem-solving abilities.

In normal IQ testing, the tester makes every effort NOT to  distract the testees, unlike the deliberately distracting procedure reported below. 

The journal article is Poverty Impedes Cognitive Function

The size of your pay packet dictates more than just your holiday choice or the size of your car - it also influences your intelligence.  Financial worries tax the brain of those on low incomes, reducing their IQ by up to 13 points, scientists have found.

As a result, those with limited means are more likely to make bad decisions, such as taking on too much debt, which perpetuate their financial woes.

But researchers discovered when low-income individuals had their financial burdens removed, their intelligence returned to the same levels as higher earners.  The findings suggests that far from low intellect resulting in reduced pay, it is our financial woes that render us less clever.

‘Our results suggest that when you’re poor, money is not the only thing in short supply. Cognitive capacity is also stretched thin,’ said Harvard economist Sendhil Mullainathan.

‘That’s not to say that poor people are less intelligent than others. What we show is that the same person experiencing poverty suffers a cognitive deficit as opposed to when they’re not experiencing poverty.

‘It’s also wrong to suggest that someone’s cognitive capacity has gotten smaller because they’re poor. In fact, what happens is that your effective capacity gets smaller, because you have all these other things on your mind, you have less mind to give to everything else.’ He said individuals with financial worries are like a computer that has slowed down because it is carrying out more than one function.

‘It’s not that the computer is slow, it’s that it’s doing something else, so it seems slow to you. I think that’s the heart of what we’re trying to say,’ he added.

In the study, published in the journal Science, the team from US and British universities carried out a series of experiments in a US shopping mall.

Researchers selected 400 people at random and divided them into a ‘poor’ or ‘rich’ group based on their income, before subjecting them intelligence testing.

Prior to the experiment, half of the participants were asked to think about how they would pay for $1,500 of urgent repairs on their car if it had broken down. The aim was to get participants to focus on their own financial worries.

The study found poor participants performed much worse in the IQ test if they first considered their economic circumstances, but the better off were unaffected.

However, the group that was not primed to think about their finances scored similarly in the intelligence tests irrespective of their income.

‘For the poor, because these monetary concerns are just below the surface, the question brings them to the top,’ said Professor Mullainathan. ‘The result was, for that group, the gap between the rich and the poor goes up, in both IQ and impulse control. There was no gap in the other group, but ask them anything that makes them think about money and you see this result.’

In a second set of tests, the scientists travelled to rural India, where sugar cane farmers are paid the majority of their income once a year.

They found they performed significantly better at intelligence tests in the month after being paid - the equivalent of 10 IQ points - than just before, when their savings had dwindled.

‘The month after the harvest, they’re pretty rich, but the month before - when the money has run out - they’re pretty poor,’ Professor Mullainathan said. ‘What we did is look at the same people the month before and the month after the harvest, and what we see is that IQ goes up, cognitive control, or errors, goes way down, and response times go way down.’