The burden of experience: Remembering life events increases poor people's rejection of risky but favorable bets (Updated June 20, 2024).

A study examined how recalling negative or positive life experiences affects the acceptance of mixed gambles, which simulate choices in life that involve both risks and opportunities. The study found that recalling a negative life experience significantly reduced the average expected value of accepted gambles, while recalling a positive life experience also had a similar effect, although to a lesser extent. However, these effects were only observed in individuals living in poverty, while non-poor individuals were not affected. The findings suggest that the burden of poverty can increase loss aversion and discourage the poor from accepting risky investments that could help them escape poverty in the long run. [Extracted from the article]