The Effect of Fluctuations in Monetary Resources on Dutch Students’ Cognitive Function: Does having less mean that much?

Recent research proposed a new perspective on the concept of scarcity by defining it as having less than you feel you need. Scarcity, in any form, leads to less mental resources, known as bandwidth. Evidence has been found that individuals experiencing scarcity, due to fluctuations in income, cognitively underperform their counterparts. Past studies in this new field of science focused on farmers in a third world country and low-income households. This study expands on the existing literature by focusing on Dutch students. An experimental study was conducted comparing cognitive performance before and after the subject population received two very relevant monthly payments. It was found that subjects neither experienced higher feelings of scarcity nor felt more financially pressed as a result of fluctuations in their income. Moreover, no impediment of cognitive function was found. This can be seen as evidence that fluctuations in monetary resources do no universally result in higher perceived scarcity and lower cognitive function. The role of context, environment and uncertainty might be crucial in this new field.