Evidence for Opportunity Cost Neglect in the Poor
Open accessAbstract
People often neglect opportunity costs: They do not fully take into account forgone alternatives outside of a particular choice set. Several scholars have suggested that poor people should be more likely to spontaneously consider opportunity costs, because budget constraints should lead to an increased focus on trade‐offs. We did not find support for this hypothesis in five high‐powered experiments (total N = 2325). The experiments used different products (both material and experiential) with both high and low prices (from $8.50 to $249.99) and different methods of reminding participants of opportunity costs. High‐income and low‐income participants showed an equally strong decrease in willingness to buy when reminded of opportunity costs, implying that both the rich and the poor neglect opportunity costs. © 2017 The Authors Journal of Behavioral Decision Making Published by John Wiley & Sons Ltd.
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Plantinga et al. (2018) found equal rates of opportunity cost neglect among low-income and high-income people.
“They found equal rates of opportunity cost neglect among low-income and high-income people.”
From Poverty and economic decision making: a review of scarcity theory (2022) · cites this paper as Plantinga et al. (2018)
The Abstract and General Discussion report that low- and high-income participants showed equally strong decreases in willingness to buy when reminded of opportunity costs, indicating neglect in both groups. They do not report equal rates of neglect; an equally strong response to the reminder is not a measured equality in prevalence. (LLM, conf=0.85)
Experimental — accuracy not yet measuredThe result that high- and low-income participants showed an equally strong decrease in willingness to buy was robust under both objective and subjective poverty measures and to different types and prices of the offered products.
“This result was robust under both objective and subjective poverty measures and to different types and prices of the offered products.”
From Poverty and economic decision making: a review of scarcity theory (2022) · cites this paper as Plantinga et al. (2018)
The Experiments > Results passages (page not provided) support the finding across objective and subjective poverty measures and report no significant moderation by product price. But product type did moderate the effect: for material products, the reminder reduced willingness to buy more strongly among poorer participants, so the claim of an equally strong decrease across product types is overstated. (LLM, conf=0.88)
Experimental — accuracy not yet measuredHigh-income and low-income participants showed an equally strong decrease in willingness to buy in response to the opportunity cost reminder.
“High-income and low-income participants showed an equally strong decrease in willingness to buy in response to the reminder.”
From Poverty and economic decision making: a review of scarcity theory (2022) · cites this paper as Plantinga et al. (2018)
The quasi-experimental design of Plantinga et al. (2018) does not allow drawing final conclusions about causality because their scarcity measure was based on existing rather than manipulated income levels.
“Third, the quasi-experimental design of their study does not allow drawing final conclusions about causality as their scarcity measure was based on existing rather than manipulated income levels.”
From Poverty and economic decision making: a review of scarcity theory (2022) · cites this paper as Plantinga et al. (2018)
The results of Plantinga et al. (2018) do not support the proposition that poverty induces trade-off thinking.
“Furthermore, the results of Plantinga et al. (2018) do not support the proposition of scarcity theory that poverty induces trade-off thinking.”
From Poverty and economic decision making: a review of scarcity theory (2022) · cites this paper as Plantinga et al. (2018)
Plantinga et al. (2018) did not find evidence that the poor show less opportunity cost neglect than the rich.
“However, they did not find evidence that the poor show less opportunity cost neglect than the rich.”
From Poverty and economic decision making: a review of scarcity theory (2022) · cites this paper as Plantinga et al. (2018)
Other studies found that high- and low-income groups are equally sensitive to opportunity cost neglect and the anchoring and mental budgeting effect.
“However, other studies found that highand low-income groups are equally sensitive to opportunity cost neglect (Plantinga et al. 2018) and the anchoring and mental budgeting effect (Shah et al. 2015).”
From Poverty and economic decision making: a review of scarcity theory (2022) · cites this paper as Plantinga et al. 2018
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- Authors
- Plantinga, A., Krijnen, J. M. T., Zeelenberg, M., & Breugelmans, S. M.
- Affiliations
- Tilburg University (NL)
- University of California, Los Angeles (US)
- Corresponding author
- Plantinga, Arnoud
- Venue
- Journal of Behavioral Decision Making
- Publisher
- Wiley
- Published
- 2017-09-11
- Volume
- 31
- Issue
- 1
- Pages
- 65-73
- ISSN
- 0894-3257 (ISSN-L)
- 1099-0771
- PMC
- PMC5763356
- OpenAlex
- W2755013013
- Cited by
- 29
- References
- 41
- Citations by year
- 2026: 3 · 2025: 3 · 2024: 1 · 2023: 4 · 2022: 7 · 2021: 3 · 2020: 5 · 2018: 3
- FWCI
- 1.72
- Type
- journal article
- Language
- en
- Open access
- hybrid
- doi.org
- Licence
- Locations
- Journal of Behavioral Decision Making (publishedVersion, cc-by)
- PubMed Central (publishedVersion, cc-by)
- Research portal (Tilburg University) (publishedVersion, cc-by)
- PubMed (publishedVersion)
- Data Archiving and Networked Services (DANS) (submittedVersion, other-oa)
- VU Research Portal (submittedVersion, other-oa)
- Topics
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Social Sciences › Safety Research › Experimental Behavioral Economics Studies
- Social Sciences › Business, Management and Accounting › Accounting › Financial Literacy, Pension, Retirement Analysis
- Keywords
- poverty, budget constraints, willingness to pay, price sensitivity, experience goods, material goods, income gap, choice framing, purchase decision
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