It is a similar situation with buying a car for $500 that will require lots of repairs vs. a more expensive car that will give you a lower cost per mile.
While this does add some drag, in most of the situations I've actually seen, it isn't the main barrier to getting out of poverty. The main barrier seems to be a culture or mindset that prioritizes short term benefit/feelings over long term benefits even when there are other options. For example, things like getting a dog, signing up for cable TV, getting an unnecessarily expensive new phone, spending money on going out to eat, etc.
For many people in poverty, their experiences make these decisions feel very rational so it is hard to think any differently.
While this does add some drag, in most of the situations I've actually seen, it isn't the main barrier to getting out of poverty. The main barrier seems to be a culture or mindset that prioritizes short term benefit/feelings over long term benefits even when there are other options. For example, things like getting a dog, signing up for cable TV, getting an unnecessarily expensive new phone, spending money on going out to eat, etc.
For many people in poverty, their experiences make these decisions feel very rational so it is hard to think any differently.