Over the course of this semester, the Sound Economics class will be reading a book called Scarcity: Why Having Too Little Means So Much by Sendhil Mullainathan and Eldar Shafir. As we read, we will take turns updating you, our readers, on the general themes of the book, along with the specific themes of each chapter. I was given the opportunity to provide the initial overview, and introduce the introduction.
The introduction begins with some anecdotes from the authors about personal experiences with scarcity, and examples of scarcity: a person who recently lost their job, a busy professional, or the extreme case of people starving. They use these examples to show how scarcity, or having less than you feel you need, impacts people every day.
The authors then clarify that they aren’t seeking to compete with the economic research about physical scarcity, or limits in money, time, or resources, but are instead interested in the feeling of scarcity. The focus of this book is on how people respond to the feeling of scarcity, and how it impacts decision-making. For example, scarcity reduces mental capacity or bandwidth, and leads to more poor decisions in the future. This can explain why many people who are in conditions of scarcity struggle to escape poverty.