Poverty is a cognitive tax. Analyse the

  Jul 07, 2016

The evidence now is fairly strong that people have cognitive limitations that lead them not to process all the available information. Poor people in particular suffer from a lot of cognitive constraints. Sendhil Mullainathan and Eldar Shafir  developed the idea of a “scarcity mindset”. The key finding is that poverty is a cognitive tax; it depletes our resources.

Poor people cant afford nutritious  food and thus their cognitive capacities become stunted. Because poverty is a vicious cycle, it is almost inherited. Our cognition is limited -- we can only think about a limited number of things at one time, and when the number of things we have to pay attention to goes beyond a certain threshold, we start making errors. Poor people have a lot more things they have to pay attention to. Poor people have to keep track of the price of everything they require. There's no room for error. If they spend too much on the milk , they will not be able to  afford the bread.

That's only  one of the many taxes on the cognitive load of poor people. David Graeber's Utopia of Rules details another: thinking of  what rich people are thinking. Poor people who antagonise the  rich people face reprisals far beyond those that rich people can expect from each other or from poor people.
This isn't unique to cash-poverty. Mullainathan talks of  "time poor" -- being overburdened with immediate livelihood concerns. This scarcity depletes  thoughtful attention to longer-term  priorities.

From the policy side, apart from developmental interventions, we also need to bring about behaviour changes as in Swachh Bharat against open defecation. Also, simplify government programmes. Too many programmes are too complicated  for poor to come on board  — that itself is a cognitive tax.