Scarcity Frames Value

The literature lacks an up-to-date, integrative, and critical review of all key aspects of scarcity theory.

“While the field is fast-growing, the literature lacks an up-to-date, integrative, and critical review of (the evidence for) all key aspects of scarcity theory.”

Lower-income participants were less sensitive to the proportional size of the discount.

“However, lower-income participants were less sensitive to the proportional size of the discount.”

The study designs of Shah et al. (2015) and Mullainathan and Shafir (2013) involved hypothetical decision scenarios and used existing income levels as the scarcity measure.

“Their study designs also involved hypothetical decision scenarios and they used existing income levels as scarcity measure.”

Shah et al. (2015) showed that low-income people were less susceptible to irrelevant features in valuing offers, items, and situations.

“In a series of experiments, Shah et al. (2015) showed that low-income people were less susceptible to irrelevant features in valuing offers, items, and situations.”

These methodological notes also apply to the studies of Shah et al. (2015) and Mullainathan and Shafir (2013).

“Importantly, these methodological notes also apply to the studies of Shah et al. (2015) and Mullainathan and Shafir (2013), discussed before.”

Some experiments conducted by Shah et al. (2015) did not reveal differences between higher- and lower-income participants.

“Some experiments conducted by Shah et al. (2015) did not reveal differences between higher- and lower-income participants.”

Shah et al. (2015) did not find significant differences between income groups for the mental budgeting effect in the lost ticket scenario.

“Similarly, they did not find significant differences between both income groups for the mental budgeting effect in the lost ticket scenario (Tversky and Kahneman 1981).”

Results of most studies underpin the proposition that low-income people report more trade-off thinking and value offers and products more consistently than higher-income individuals.

“Results of most studies underpin this proposition showing that low-income people report more trade-off thinking (Mullainathan and Shafir 2013; Shah et al. 2015) and value offers and products more consistently (Shah et al. 2015) than higher-income individuals.”

Shah et al. (2015) did not find that lower-income participants were less sensitive to the anchoring effect.

“Contrary to their expectations, they did not find that lower-income participants were less sensitive to the anchoring effect.”

Some experiments revealed that the poor are less susceptible to relativity bias.

“Some of these experiments revealed that the poor are less susceptible to relativity bias.”

The proposed underlying mechanism is that the poor naturally think about trade-offs because they face tight budgets.

“The proposed underlying mechanism is that the poor naturally think about trade-offs because they face tight budgets (Mullainathan and Shafir 2013; Shah et al. 2015).”

Compared to higher-income people, lower-income individuals report more trade-off thinking in hypothetical purchases and in deciding about their willingness to pay for a product.

“Compared to higher-income people, lower-income individuals report more trade-off thinking in case of hypothetical purchases (Mullainathan and Shafir 2013) and deciding about their willingness to pay for a product (Shah et al. 2015).”

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).”