Thursday, December 11, 2014

Book Review: Sendhil Mullainathan and Eldar Shafir's Scarcity: Why Having Too Little Means So Much

In Scarcity: Why Having Too Little Means So Much, Sendhil Mullainathan and Eldar Shafir explore the implications of scarcity, a condition that occurs when you have less than you feel you need. Scarcity comes in all shapes and sizes—we see it in money, sleep, work, packing, time with our kids, addictions to email and social media—no matter what the item, people are constantly battling between conditions of abundance and scarcity. Doctors overbook operating rooms and are forced to postpone surgeries, work into the night, and increase cost. College students are assigned a term paper a month before it is due, but few rush out and get to work, thus at the last minute they become frantic and paper obsessed. Gone forever are the wasted moments brought on by procrastination, in is the condition of tunneling where every second counts, where the worker suddenly appears dissatisfied, where there cognitive ability (bandwidth) is taxed either for the benefit of the paper and the detriment of all else or perhaps for collective detriment in general.

While the text has a slightly academic tilt at first, as it progresses Mullainathan and Shafir take a Freakoncomics twist and creatively explore the world of scarcity. Whether it is the effects of being paid once a year has on sugar cane farmers or the consequences of checking your email prior to starting on an unrelated project, the authors explore the unexpected consequences of scarcity. In terms of the former, an annual payment requires the farmer to budget an entire year from harvest point on, something that becomes increasingly taxing as their funds become scarce, suddenly they cannot buy fertilizer or weed their crops, tradeoffs that reduce yield and tax future finances. And what is the harm of checking that email before your child’s bath or personal writing time? Such actions prevent one from tunneling in and focusing in on the task at hand, thus it deteriorates said quality time for even if you don’t respond, your mind becomes taxed by the bandwidth required to ignore the email.

In each instance, Mullainathan and Shafir explore situations in a way that moves beyond common sense and in an effort to find novel solutions to eliminate scarcity traps in favor of creating a productive, driven situation. The explore the rise and fall of cognitive ability, executive management skills, and even happiness all in relation to scarcity. Further, they dive into why, when given the opportunity to create a buffer from said scarcity, people often find themselves in the very same traps as before. If you enjoy studies in human behavior from an economic standpoint, read this text. If you simply want to understand why you act the way you do when sleep is lost or money is tight, then Scarcity: Why Having Too Little Means So Much is for you.