Winnipeg Free Press - PRINT EDITION

Money worries sap IQs, study suggests

Minds preoccupied with cash woes operate less efficiently: scientists

  • Print

WASHINGTON -- Being short on cash may make you a bit slower in the brain, a new study suggests.

People worrying about having enough money to pay their bills tend to lose temporarily the equivalent of 13 IQ points, scientists found when they gave intelligence tests to shoppers at a New Jersey mall and farmers in India.

The idea is that financial stress monopolizes thinking, making other calculations slower and more difficult, sort of like the effects of going without sleep for a night.

And this money-and-brain crunch applies, albeit to a smaller degree, to about 100 million Americans who face financial squeezes, says the team of economists and psychologists who wrote the study published in Friday's issue of the journal Science.

"Our paper isn't about poverty. It's about people struggling to make ends meet," said Sendhil Mullainathan, a Harvard economist and study co-author. "When we think about people who are financially stressed, we think they are short on money, but the truth is they are also short on cognitive capacity."

If you are always thinking about overdue bills, a mortgage or rent, or college loans, it takes away from your focus on other things. So being late on loans could end up costing you both interest points and IQ points, Mullainathan said.

The study used tests that studied various aspects of thinking including a traditional IQ test, getting the 13-IQ-point drop, said study co-author Jiaying Zhao, a professor of psychology and sustainability at the University of British Columbia.

The scientists looked at the effects of finances on the brain both in the lab and in the field. In controlled lab-like conditions, they had about 400 shoppers at Quaker Bridge Mall in central New Jersey consider certain financial scenarios and tested their brain power. Then they looked at real life in the fields of India, where farmers only get paid once a year. Before the harvest, they take out loans and pawn goods. After they sell their harvest, they are flush with cash.

Mullainathan and colleagues tested the same 464 farmers before and after the harvest and their IQ scores improved by 25 per cent when their wallets fattened.

"It's a very powerful effect," said study co-author Eldar Shafir, a Princeton University psychology professor. "When you are dealing with budgetary finances, it does intrude on your thinking. It's at the top of your mind."

In the New Jersey part of the study, the scientists tested about 400 shoppers, presenting them with scenarios that involved a large and a small car-repair bill. Those with family incomes of about $20,000 scored about the same as those with $70,000 incomes on IQ tests when the car bill was small. But when the poorer people had to think about facing a whopping repair bill, their IQ scores were 40 per cent lower.

Education differences can't be a major factor because the poor only scored worse when they were faced with big bills, Shafir said. The more educated rich may have learned to divide their attention, but that wouldn't be a significant factor, he said.

The study's authors and others say the results contradict long-standing conservative economic social and political theory that say it is individuals -- not circumstances -- that are the primary problem with poverty. In the case of India, it was the same people before and after, so it can't be the person's fault.

"For a long time we've been blaming the poor for their own failings," Zhao said. "We're arguing something very different."

 

-- The Associated Press

Republished from the Winnipeg Free Press print edition August 30, 2013 B7

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

The Whiteboard - Jets' 5-on-3 penalty kill

View more like this

Photo Store Gallery

  • A squirrel enjoys the morning sunshine next to the duck pond in Assiniboine Park Wednesday– June 27, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • PHIL HOSSACK / WINNIPEG FREE PRESS 060710 The full moon rises above the prairie south of Winnipeg Monday evening.

View More Gallery Photos

Poll

Now that former cabinet minister Theresa Oswald has entered the NDP leadership race, do you believe the "gang of five" rebel ministers were right to publicly criticize Premier Greg Selinger's leadership?

View Results

View Related Story

Ads by Google