Living on the Edge: Investigating Experiences of Poverty Through the Lens of the Desperation Threshold Model

The Desperation Threshold Model (DTM) seeks to explain conflicting findings about the risk propensity of people living in poverty, predicting risk aversion when they can still meet their basic needs, and risk taking when they cannot. The DTM makes assumptions: that people have a conception of basic needs, that their ability to meet these motivates their decisions, and that they modulate risky decisions depending on their ability to do so. The realism of these assumptions has not yet been investigated. To start filling this gap, we investigated experiences of poverty through the lens of the DTM, using two complementary approaches: a pre-registered online survey with British participants (n = 300) and semi-structured qualitative interviews with very low-income individuals in France (n = 14). Our results imply that basic needs have both a context-general component and context-specific elaborations. Furthermore, participants often relied on social and institutional resources when experiencing financial adversity, indicating that measuring only personal income or wealth might not accurately capture the resources available to people. With respect to the DTM’s main predictions, most individuals close to—but still above—the desperation threshold exhibited caution and took a safety-first approach, consistent with risk-averse behavior. Risky or antisocial behaviors (e.g., cheating, stealing) emerged only in rare instances of severe financial hardship and complete lack of external support. These results suggest that the DTM’s main assumptions are empirically grounded but that they need to be qualified in specific ways. They also suggest that abstract models like the DTM can capture something about the experience of people living in conditions of poverty.