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Consequences of Poverty on Economic Decision-Making: Assessing the Verisimilitude of the Cognitive Mechanism.

ABSTRACT: The paper aims to assess the verisimilitude of the hypothesized model of poverty perpetuation which links socioeconomic situation and economic preferences via cognitive load, executive functions, and intuitive/deliberative decision-making styles. In order to test the model against the data, three studies (exploratory, confirmatory, and replication) were conducted with a total sample size of 1182 participants. The results showed that neither the proposed model as a whole found the required support in the data nor the consequent, theoretically justifiable, respecifications improved its fit so that it could be deemed acceptable. Simultaneously, the dyadic relationships between the variables were mainly found to be weak. The sensitivity analysis revealed that the majority of the observed estimates varied substantively depending on the arbitrary analytic decisions of the researcher. In summary, the hypothesized cognitive mechanism does not explain what economic decision-making depends on nor why people fall into poverty traps. The paper discusses several plausible sources of the negative findings and possible directions for future research are suggested.

SUBMITTER: Adamkovic M

PROVIDER: S-EPMC7031509 | biostudies-literature | 2020

REPOSITORIES: biostudies-literature

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Consequences of Poverty on Economic Decision-Making: Assessing the Verisimilitude of the Cognitive Mechanism.

Adamkovič Matúš M

Frontiers in psychology 20200213

The paper aims to assess the verisimilitude of the hypothesized model of poverty perpetuation which links socioeconomic situation and economic preferences via cognitive load, executive functions, and intuitive/deliberative decision-making styles. In order to test the model against the data, three studies (exploratory, confirmatory, and replication) were conducted with a total sample size of 1182 participants. The results showed that neither the proposed model as a whole found the required suppor ...[more]

PMID: 32116963

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Project description:The links between emotions, bio-regulatory processes, and economic decision-making are well-established in the context of age-related changes in fluid, real-time, decision competency. The objective of the research reported here is to assess the relative contributions, interactions, and impacts of affective and cognitive intelligence in economic, value-based decision-making amongst older adults. Additionally, we explored this decision-making competency in the context of the neurobiology of aging by examining the neuroanatomical correlates of intelligence and decision-making in an aging cohort. Thirty-nine, healthy, community dwelling older adults were administered the Iowa Gambling Task (IGT), an ecologically valid laboratory measure of complex, economic decision-making; along with standardized, performance-based measures of cognitive and emotional intelligence (EI). A smaller subset of this group underwent structural brain scans from which thicknesses of the frontal, parietal, temporal, occipital, cingulate cortices and their sub-sections, were computed. Fluid (online processing) aspects of Perceptual Reasoning cognitive intelligence predicted superior choices on the IGT. However, older adults with higher overall emotional intelligence (EI) and higher Experiential EI area/sub-scores learned faster to make better choices on the IGT, even after controlling for cognitive intelligence and its area scores. Thickness of the left rostral anterior cingulate (associated with fluid affective, processing) mediated the relationship between age and Experiential EI. Thickness of the right transverse temporal gyrus moderated the rate of learning on the IGT. In conclusion, our data suggest that fluid processing, which involves "online," bottom-up, cognitive processing, predicts value-based decision-making amongst older adults, while crystallized intelligence, which relies on "offline" previously acquired knowledge, does not. However, only emotional intelligence, especially its fluid "online" aspects of affective processing predicts the rate of learning in situations of complex choice, especially when there is a paucity of cues/information available to guide decision-making. Age-related effects on these cognitive, affective and decision mechanisms may have neuroanatomical correlates, especially in regions that form a subset of the human mirror-neuron and mentalizing systems. While superior decision-making may be stereotypically associated with "smarter people" (i.e., higher cognitive intelligence), our data indicate that emotional intelligence has a significant role to play in the economic decisions of older adults.

Dataset Information

Consequences of Poverty on Economic Decision-Making: Assessing the Verisimilitude of the Cognitive Mechanism.

Publications

Consequences of Poverty on Economic Decision-Making: Assessing the Verisimilitude of the Cognitive Mechanism.

Similar Datasets

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