The psychology of scarcity

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Guest: Eldar Shafir

[From the Radio Times Archives] What happens when people are short on money, on time, on friends, or on food?  Their judgment gets impaired.  Princeton University behavioral economist ELDAR SHAFIR studies the psychological effects of scarcity and has found that when people lack something, their decision-making, even their IQ, gets compromised.  Could this explain why poverty is so difficult to escape?  Shafir has co-authored a book on this topic with Sendhil Mullainathan called Scarcity: Why Having Too Little Means So Much.  He spoke with Marty last year about why deficits can be so detrimental.

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