Research / BFI Working PaperJun 26, 2023

Scarcity and Inattention

Information can increase the quality of decision making. However, some individuals might systematically be less likely to pay attention to such information. Previous research suggests that a “scarcity mindset” focuses attention on immediate needs, leaving less cognitive bandwidth for attending to other information. In this article, we examine the relationship between inattention to information and two types of scarcity – financial and social. We use survey data collected shortly after the onset of the pandemic from 345 low-income parents and from the directors of the 11 preschools attended by the children of these parents. To measure inattention, we compare what information parents report receiving from the school with the information schools report sending. We measured financial scarcity, i.e., a self-report of not having enough money to make ends meet, and social scarcity, i.e., a self-report of loneliness. We find that both types of scarcity are significantly, positively, and independently associated with inattention.

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