Here's a thought experiment: You want to spend a reasonably large sum of money providing assistance to a group of people with limited means. There's a lot of ways you might do that with a lot of strings and safeguards involved, but what about just giving them money -- "get cash directly into the hands of the poor in the cheapest, most efficient way possible." You and I might prefer that, since we, of course, are reputable people and good stewards and understand our own particular needs. But what about, well, others?

Economist Tavneet Suri has done more than just think about that; her fieldwork includes handing out money across villages in two rural areas in Kenya to see what happens. Her experiments include giving out a lump sum of cash and also spreading out that same amount over time. The results she details for host David Edmonds in this Social Science Bites podcast are, to be frank, heartening, although the mechanisms of disbursement definitely affect the outcomes.

Despite the good news, the idea of a universal basic income is by no means a settled remedy for helping the poor. For one thing, Suri says, "it's super, super expensive. It’s really expensive. And so, the question is, “Is that expense worth it?” And to understand that I think we need a few more years of understanding the benefits, understanding what people do with the incomes, understanding whether this can really kickstart these households out of poverty."

And perhaps the biggest question is whether the results of fieldwork in Kenya is generalizable. "I would love to do a study that replicates this in the West," she says. "The one thing about the West that I think is worth saying that's different is you wouldn't add it on top of existing programs. The idea is you would substitute existing programs with this. And that to me is the question: if you substituted it, what would happen?"

Suri is the Louis E. Seley Professor of Applied Economics and at the Massachusetts Institute of Technology's Sloan School of Management. She is an editor at the Review of Economics and Statistics; co-chair of the Agricultural Technology Adoption Initiative at the Abdul Latif Jameel Poverty Action Lab, known as J-PAL, at MIT; co-chair of the Digital Identification and Finance Initiative at J-PAL Africa; a member of the executive committee at J-PAL; and a faculty research fellow at the National Bureau of Economic Research.

How hard do we fight against information that runs counter to what we already think? While quantifying that may be difficult, Alex Edmans notes that the part of the brain that activates when something contradictory is encountered in the amygdala - “that is the fight-or-flight part of the brain, which lights up when you are attacked by a tiger. This is why confirmation can be so strong, it's so hardwired within us, we see evidence we don't like as being like attacked by a tiger.”

In this Social Science Bites podcast, Edmans, a professor of finance at London Business School and author of the just-released May Contain Lies: How Stories, Statistics, and Studies Exploit Our Biases – And What We Can Do About It, reviews the persistence of confirmation bias -- even among professors of finance.

“So, what is confirmation bias?” he asks host David Edmonds. “This is the temptation to accept something uncritically because we'd like it to be true. On the flip side, to reject a study, even if it's really careful, because we don't like the conclusions.”

Edmans made his professional name studying social responsibility in corporations; his 2020 book Grow the Pie: How Great Companies Deliver Both Purpose and Profit was a Financial Times Book of the Year. Yet he himself encountered the temptation to both quickly embrace findings, even flimsy ones, that support our thesis and to reject or even tear apart research, even robust results, that doesn’t.

While that might seem like an obviously critical thinking pitfall, surely knowing that it’s likely makes it easier to avoid. You might think so, but not necessarily. “So smart people can find things to nitpick with, even if the study is completely watertight,” Edmans details. “But then the same critical thinking facilities are suddenly switched off when they see something they like. So intelligence is, unfortunately, something deployed only selectively.”

Meanwhile, he views the glut of information and the accompanying glut of polarization as only making confirmation bias more prevalent, and not less.

Edmans, a fellow of the Academy of Social Sciences and former Fulbright Scholar, was previously a tenured professor at the Wharton Business School and an investment banker at Morgan Stanley. He has spoken to policymakers at the World Economic Forum and UK Parliament, and given the TED talk “What to Trust in a Post-Truth World." He was named Professor of the Year by Poets & Quants in 2021.