Exposure to Poverty and Productivity

CentER Discussion Paper Series No. 2016-027

29 Pages Posted: 28 Jul 2016

See all articles by Patricio S. Dalton

Patricio S. Dalton

Tilburg University - Center for Economic Research (CentER)

Victor Gonzalez

Tilburg University - Center and Faculty of Economics and Business Administration

Charles N. Noussair

Tilburg University

Date Written: July 22, 2016

Abstract

We study whether poverty can induce affective states that decrease productivity. In a controlled laboratory setting, we find that subjects randomly assigned to a treatment, in which they view a video featuring individuals that live in extreme poverty, exhibit lower subsequent productivity compared to subjects assigned to a control treatment. Questionnaire responses, as well as facial recognition software, provide quantitative measures of the affective state evoked by the two treatments. Subjects exposed to images of poverty experience a more negative affective state than those in the control treatment. Further analyses show that individuals in a more positive emotional state exhibit less of a treatment effect. Also, those who exhibit greater attentiveness upon viewing the poverty video are less productive. The results are consistent with the notion that exposure to poverty can induce a psychological state in individuals that adversely affects productivity.

Keywords: Poverty, Productivity, Mood, Emotions, Limited attention, Experiments

JEL Classification: D03, J24, C91

Suggested Citation

Dalton, Patricio S. and Gonzalez, Victor and Noussair, Charles N., Exposure to Poverty and Productivity (July 22, 2016). CentER Discussion Paper Series No. 2016-027. Available at SSRN: https://ssrn.com/abstract=2814946 or http://dx.doi.org/10.2139/ssrn.2814946

Patricio S. Dalton (Contact Author)

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Victor Gonzalez

Tilburg University - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Charles N. Noussair

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

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