Exposure to Poverty and Productivity

By:	Dalton, Patricio (Tilburg University, Center For Economic Research) ; Gonzalez Jimenez, Victor (Tilburg University, Center For Economic Research) ; Noussair, Charles (Tilburg University, Center For Economic Research)
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:	D03 J24 C91
URL:	http://d.repec.org/n?u=RePEc:tiu:tiucen:fcd7ed5d-22ed-4142-8143-b7533b40044e&r=ltv