Less is More
The poor might actually be more generous than the wealthy
When bad things happen, people come together.
We’ve seen this phenomenon happen again and again — recently in Louisiana as Tropical Storm Barry caused severe flooding and tens of thousands suffered power outages. Before the storm even made landfall, groups of volunteers from Texas and South Carolina made their way to Louisiana to help with disaster relief.
Natural disasters like this (and other tragedies) have a way of bringing out the best in people. Groups of people also experience this type of bonding when they go through times of economic hardship.
Researchers Billur Aksoy at Rensselaer Polytechnic Institute and Marco Palma at Texas A&M’s Human Behavior Lab wanted to examine the charitable behavior of people when they were financially secure and when they were not. The lab’s director, Palma, led a group of scientists to a remote village deep in the heart of Guatemala to test this phenomenon.
The residents of this village, primarily coffee farmers, live in extreme poverty for most of the year until the harvest season, when they become relatively wealthy (by their standards.) To us, this is like an extreme case of living paycheck to paycheck.
This seasonal change in wealth allowed the researchers to observe how the villagers behaved in times of scarcity compared to times of abundance.
During the harvest, when the villagers were financially secure, researchers gave them the equivalent of $5 USD (an average day’s pay for them) and asked them how much — if any — they would like to donate to an anonymous member of their village. On average, the villagers donated about a third of their money allocation.
The scientists then asked them to do the same task except the person receiving the donation was someone from outside their village. The villagers donated much less to the anonymous stranger.
This wasn’t very surprising. It makes sense that they would be more generous to family, friends, and neighbors than to a complete stranger.
“Indeed, this phenomenon has been observed and documented in the literature many times in various countries and with different subject pools.” said Aksoy.
Then the researchers repeated this same experiment when the villagers were experiencing scarcity (before they harvested their coffee beans.) This is where things got interesting.
They found that the villagers donated at almost exactly the same levels as they did when they experienced abundance. So they gave more as a proportion of their income.
Rationally, that goes against what we believe people would do. If you have very little, you want to conserve your very scarce resources, so why would you give so much away?
Even stranger, when the researchers asked how much money the villagers would give to the stranger from outside their village, they increased their donation to be about equal to what they gave to their own villagers.
They gave more money to strangers when they were in absolute poverty conditions than they did when they were relatively comfortable during the harvest period.
Keep in mind they were dealing with real money. This was not a hypothetical game.
The poorer they became, the more charitable they were to strangers.
To me, this explains why the people of Ghana and women in Uganda donated to victims of Hurricane Katrina.
“I think the reason that this happens is that the poorer you are, the more empathic to all people you become,” said Aksoy. “This is probably because you can see yourself facing a similar circumstance and your group identity may become less important.”
We sometimes think of generosity as a luxury — those who are wealthy can afford to be generous because they have more to give.
We don’t really think about the poor being generous because we don’t think they have anything to give. In reality, they are perhaps more in-tune with others in need because they know that every little bit helps.
The wealthy may appear to give more, but proportionally, those experiencing economic hardship might actually be more generous.
