Quick snippets from our morning read on Tuesday, 08th December 2020
Today’s morning read is an article on how money affects the mind. Paul Piff shares his findings on a research he carried out to answer the question; Does money make you mean?
As a person’s levels of wealth increase, their feelings of compassion and empathy go down, and their feelings of entitlement, of deservingness, and their ideology of self-interest increases. We share 3 of the 6 findings on how money affects the mind.
How does being rich affect the way we behave?
Finding #1: We rationalize advantage by convincing ourselves we deserve it
The study: In a UC Berkeley study, Piff had more than 100 pairs of strangers play Monopoly. A coin-flip randomly assigned one person in each pair to be the rich player: they got twice as much money to start with, collected twice the salary when they passed go, and rolled both dice instead of one, so they could move a lot farther. Piff used hidden cameras to watch the duos play for 15 minutes.
The results: The rich players moved their pieces more loudly, banging them around the board, and displayed the type of enthusiastic gestures you see from a football player who’s just scored a touchdown. They even ate more pretzels from a bowl sitting off to the side than the players who’d been assigned to the poor condition, and started to become ruder to their opponents. Moreover, the rich players’ understanding of the situation was completely warped: after the game, they talked about how they’d earned their success, even though the game was blatantly rigged, and their win should have been seen as inevitable. “That’s a really, really incredible insight into how the mind makes sense of advantage,” Piff says.
Finding #3: People who make less are more generous…on the large scale
The study: A 2012 Chronicle of Philanthropy study examined Internal Revenue Service records of Americans who earned at least $50,000 in 2008, then charted charitable giving across every state, city and ZIP code in the US.
The results: On average, households that earned $50,000 to $75,000 gave of 7.6 percent of their income to charity, while those who made make $100,000 or more gave 4.2 percent. Rich people who lived in less economically diverse—that is, wealthier—neighborhoods gave an even smaller percentage of their income to charity than those in more diverse neighborhoods: in ZIP codes where more than 40 percent of people made more than $200,000 a year, the average rate of giving was just 2.8 percent.
Finding #5: Poverty impedes cognitive function
The study: In this study published a few months ago, researchers Sendhil Mullainathan, Eldar Shafir and others measured farmers’ mental function a month before their harvests (when they were hurting for money) and then again a month after (when they felt flush). In a separate part of the study, they had poor and well-off participants think about finances, then determined the participants’ cognitive performance.
The results: As Mullainathan details in The New York Times, the same farmers performed worse before the harvest, when they had less money, than afterward, when they had more. And not just a little worse: their I.Q. before the harvest was 9-10 points lower, the same detriment caused by an entire night without sleep. As for the other part of the study: when poor participants thought about finances, they performed worse. Rich participants weren’t affected at all.
Read all the 6 findings in the full, insightful and resourceful article – 6 Studies On How Money Affects The Mind by Paul Piff
And as always, if you enjoyed this, check out the rest of our daily snippets, curated daily, right here on The Red Notebook.
