There are more payday loan and check cashing stores in the United States than McDonald’s, Burger King, Sears, J.C. Penney, and Target stores combined, according to Eldar Shafir, the inaugural director of the Kahneman-Tresiman Center for Behavioral Science and Public Policy at Princeton University.
“We know these loans hurt you,” Shafir said in a TEDxMidAtlantic talk, noting that the high-interest rates typically lead to further borrowing. “There’s data that shows that when payday loans are available, people are less likely to pay their bills and less likely to resort to medical treatment.”
Despite the harm caused by payday loans, they’re incredibly popular, according to Shafir. He will discuss the complex psychology of poverty and the tradeoffs people must make when resources are scarce at 5:30 p.m. Thursday, May 17, at the Virginia Tech Carilion Research Institute.
The talk, “The Scarcity Context and Mindset: Behavioral and Policy Implications,” will be webcast, and a reception will precede the presentation at 5 p.m. The presentation concludes the 2017-2018 season of the VTCRI Distinguished Public Lecture Series.
Shafir is also the Class of 1987 Professor of Behavioral Science and Public Policy and a professor of psychology and public affairs in the Woodrow Wilson School of Public and International Affairs at Princeton University.
His recent research has focused on decision-making in contexts of poverty and on the application of behavioral research to policy. He specifically studies reasoning, judgment, decision-making, and issues related to behavioral economics, with an emphasis on descriptive studies of how people make judgments and decisions in situations of conflict and uncertainty.
Shafir is past president of the Society for Judgment and Decision Making, Senior Fellow of the Canadian Institute for Advanced Research, and member of the World Economic Forum’s Global Council on the Future of Behavioural Sciences. He was a member of President Barack Obama’s Advisory Council on Financial Capability.
Shafir has received several awards, most recently a Guggenheim Fellowship and the William James Book Award. He was named one of Foreign Policy Magazine’s 100 Leading Global Thinkers of 2013, and he was elected a fellow of the American Academy of Arts and Sciences. He edited a book called “The Behavioral Foundations of Public Policy” (2012) and co-authored, with economist Sendhil Mullainathan, “Scarcity: Why Having Too Little Means So Much” (2013).
He received his undergraduate degree in cognitive science from Brown University and his doctorate, also in cognitive science, from the Massachusetts Institute of Technology.