People often assume that the poor are less competent than the wealthy. Some even suggest that the poor have flawed values or ways of thinking. But my colleagues and I have recently found that the poor outperform the rich at some financial decisions. Under poverty, people develop a unique expertise.
To appreciate this expertise, we should first come to terms with a mistake nearly everyone makes. Consider this question, which I regularly pose to my MBA students: Imagine you are buying a $300 tablet, but the salesman says the same tablet is available for $50 less at a store 20 minutes away. Would you travel for the discount? Almost certainly. Now imagine that the tablet costs $1,000. Would you still travel the 20 minutes to save $50? Now you might hesitate.
You are not alone. People are far more likely to say “no” to the second question than the first, even my MBA students, whose jobs are to make good financial decisions. This is a common response. It is also irrational.
Read the whole story: Slate