Anuj K. Shah
Assistant Professor of Behavioral Science and Neubauer Family Faculty Fellow
Shah’s journey to the behavioral sciences
While working as a research assistant during his undergraduate years, Anuj Shah became interested in memory models of decision-making and how individuals estimate probabilities. As a result, he obtained a bachelor of arts in both psychology and English literature from Washington University in St. Louis. Upon beginning his dual master’s and PhD in psychology at Princeton University, Shah explains that his advisor Eldar Shafir from the Woodrow Wilson School of Public and International Affairs inspired him to study the behavioral sciences: “Working with him showed me how to think about experiments, not just in terms of running them in the lab, but how they might apply to real-world behavior.”
Shah is now studying how conditions like poverty—whether being short of money or other resources—may affect individual cognition and translate into behavior.
How poverty affects the perception of consequences
Shah has been researching the overlap between cognition and poverty with Sendhil Mullainathan, professor of economics at Harvard University, and Eldar Shafir, professor of psychology and public affairs at Princeton University. “When you are facing some form of scarcity, it leads you to focus on particular demands on your budget for whatever resource that might be. That actually makes you look very smart, because since you are more focused on something, you are spending each dollar more efficiently. But then the downstream consequences can be somewhat negative.”
Shah explains that if one is far too focused on trying to presently make ends meet, then he or she may not be thinking about the future consequences of taking a loan. He uses lab experiments to make some participants poor and others rich within the context of various games. Participants can then borrow and save resources as they play the game. By creating this type of environment in the lab, it becomes possible to study how features of cognition (such as what people are paying attention to) can relate to broader behaviors (such as how much people borrow). And by manipulating whether individuals experience scarcity, it is possible to draw a causal link between simply not having enough and how they behave. “We see that they borrow too much. It is not because of any differences in personality…it is just a difference in not having enough resources.”
Shah is now working with Paul Niehaus to understand how unconditional cash transfers may change cognitive functioning, as well as the most effective times to use them. Individual incomes fluctuate with differing times of the year, for example when there may be harvest or rains. Shah says that one might think financial assistance should be given to individuals at the point that they have the least money. “On the other hand, that might be a point where they are already facing so many taxes on their cognitive resources or so many bandwidth taxes or so many very pressing concerns, that in that moment, it is a little bit harder to think about investing that money in some sort of durable good or some long-term expenditure.” By shifting the timing of cash transfers, it might be possible to create more sustainable gains in income.
Going forward
Although Shah is aware of the multitude of interventions attempting to alleviate poverty, he seeks to question how to make these endeavors smarter, more effective, and more efficient. “Hopefully by understanding the cognitive processes, the changes in cognition that stem from not having enough resources—whether it is time or money or otherwise—maybe then we can sort of target these interventions more effectively.”
His next steps will be to strike a better balance between conducting lab research for a social impact with learning what is more relevant for policymakers.