Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why Your Brain Treats Poverty as a Cognitive Tax
In this episode, Lucas and Luna explore the concept of 'cognitive scarcity' — how financial stress actually reduces IQ scores and decision-making capacity. They anchor the discussion in a 2013 study by Sendhil Mullainathan and Eldar Shafir, which found that farmers in India showed a drop of 9-10 IQ points in the season before harvest (when money was tight) compared to after harvest. The hosts connect this to the broader 'bandwidth tax' theory from Mullainathan's book 'Scarcity', and discuss how this changes the way we think about poverty, debt, and policy…
The skinny
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