SETH BORENSTEIN
WASHINGTON ( AP ) - Being short on cash may make you a bit slower in the brain , a new study suggests .
People worrying about having enough money to pay their bills tend to lose temporarily the equivalent of
13 IQ points , scientists found when they gave intelligence tests to shoppers at a New Jersey mall and
farmers in India .
The idea is that financial stress monopolizes thinking , making other calculations slower and more
difficult , sort of like the effects of going without sleep for a night .
And this money -and - brain crunch applies, albeit to a smaller degree , to about 100 million Americans
who face financial squeezes , say the team of economists and psychologists who wrote the study
published in Friday ' s issue of the journal Science.
"Our paper isn 't about poverty. It ' s about people struggling to make ends meet , " said Sendhil
Mullainathan, a Harvard economist and study co- author . "When we think about people who are
financially stressed , we think they are short on money , but the truth is they are also short on cognitive
capacity ."
If you are always thinking about overdue bills , a mortgage or rent , or college loans, it takes away from
your focus on other things . So being late on loans could end up costing you both interest points and IQ
points , Mullainathan said .
The study used tests that studied various aspects of thinking including a traditional IQ test , getting
the 13 IQ point drop, said study co- author Jiaying Zhao , a professor of psychology and sustainability
at the University of British Columbia.
The scientists looked at the effects of finances on the brain both in the lab and in the field . In
controlled lab - like conditions, they had about 400 shoppers at Quaker Bridge Mall in central New
Jersey consider certain financial scenarios and tested their brain power . Then they looked at real life
in the fields of India , where farmers only get paid once a year . Before the harvest , they take out
loans and pawn goods. After they sell their harvest, they are flush with cash.
Mullainathan and colleagues tested the same 464 farmers before and after the harvest and their IQ
scores improved by 25 percent when their wallets fattened.
"It 's a very powerful effect , " said study co -author Eldar Shafir, a Princeton University psychology
professor . "When you are dealing with budgetary finances , it does intrude on your thinking . It 's at the
top of your mind ."
In the New Jersey part of the study , the scientists tested about 400 shoppers, presenting them with
scenarios that involved a large and a small car repair bill. Those with family incomes of about $ 20, 000
scored about the same as those with $ 70 , 000 incomes on IQ tests when the car bill was small. But when
the poorer people had to think about facing a whopping repair bill , their IQ scores were 40 percent
lower .
Education differences can 't be a major factor because the poor only scored worse when they were faced
with big bills , Safir said . The more educated rich may have learned to divide their attention, but that
wouldn't be a significant factor , he said .
The study ' s authors and others say the results contradict long -standing conservative economic social
and political theory that say it is individuals - not circumstances - that are the primary problem with
poverty. In the case of India , it was the same people before and after , so it can' t be the person 's
fault .
"For a long time we' ve been blaming the poor for their own failings , " Zhao said . "We 're arguing
something very different."
Poverty researcher Kathryn Edin of Harvard , who wasn 't part of the study , said the research "is a big
deal that solves a critical puzzle in poverty research."
She said poor people often have the same mainstream values about marriage and two - parent families
as everyone else , but they don' t seem to act that way . This shows that it' s not their values but the
situation that impairs their decision -making , she said .

Without intending to discredit the report in anyway, but I do beg to differ. While in school,i knew a few intelligent chaps who were always running low on cash but that had no negative effect on their academic performance. On the other hand,a pocket full of cash will give a brother one less thing to worry about, hence, allowing one to focus on a particular task at hand. So all in all, they may be right to some extent.