Inattention and Poverty

Proceedings of The 5th International Conference on Research in Humanities and Social Sciences

Year: 2021


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Inattention and Poverty

Yuchen Zhao



Low cognitive capacity could be both a cause and a consequence of poverty. In this paper, I review the existing literature about poverty and cognitive capacity, with a focus on inattention. I discuss two potential channels through which poverty itself may lead to worse cognitive performance in certain tasks. Firstly, poverty causally impedes cognitive capacity and acts as a “bandwidth tax.” Secondly, poverty leads to redirection of attention towards dimensions that seem more important to poor people. Understanding the relationship between poverty and inattention also has important policy implications for helping people escape the poverty trap.

keywords: Inattention, poverty, psychological theory.