The excellent post ‘Behavioral economics has a plan to fight poverty—and it’s all about redesigning the “cockpit”‘, presents an interesting analysis of poverty. It brings on the surface the issue of cognitive overload.
The theme of the post is that one reason poor people have difficulties escaping from the poverty trap is that because of their limited means, they need to spend a large amount of cognitive capacity (which is limited for all individuals) solving basic issues such as food and shelter. As a result, they can’t quite spend enough cognitive capability on higher purposes such as, for example, developing a sustainable way to escape poverty.
And it is quite true that being well-off basically allows to avoid thinking about certain constraints such as budget when shopping for groceries and where one will sleep tonight, freeing the mind towards higher fields of thinking.
It would also mean that a way to help people escape poverty is to provide support on a temporary basis (a few weeks/months) to free some cognitive capacity to develop a sustainable way to support oneself and family.
