In this study, we examined how neighborhood socioeconomic deprivation impacts children’s intertemporal choice behavior (delay discounting) and PLEs, considering the multifaceted effects of neighborhood adversity and its underlying biological, environmental, and behavioral drivers. Our findings can be distilled into two main points. Firstly, there was a notable link of living in socioeconomically disadvantaged neighborhoods to the propensity for children to prefer immediate rewards over larger, delayed ones—a behavior known as steep delay discounting (indicative of lower impulse control) and to a higher rate of PLEs. This association was significant even after adjusting for a range of confounding factors, both observed (e.g., familial socioeconomic status) and unobserved. Secondly, the influence of disadvantaged neighborhood environments on PLEs was found to be heterogeneous. This individual variability is influenced not just by delay discounting, but also by a confluence of factors including genetic predisposition for cognitive intelligence, and brain morphometry and functioning (task activation). Causal machine learning models utilized in our study have identified a spectrum of conditions that either exacerbate vulnerability or contribute to resilience, accounting for the diverse effects of neighborhood environments on children's PLEs.
Our findings hold implications for social science. Using causal machine learning models, such as IV Forest and Double ML, we provide consistent and clear results that residential adversity during childhood leads to steeper discounting of future rewards. We propose three possible interpretations to explain the effects of neighborhood socioeconomic adversity on individual’s intertemporal decision-making, focusing on individual’s discount rate, resource scarcity, and social trust.
The longstanding economic theory posits that an individual's rate of discounting future rewards (time preference) is an exogenous parameter of intertemporal choice, established a priori, and impervious to external influences32. Since the introduction of the discounted utility model80 by Paul Samuelson in 1937, there has been limited exploration into whether environmental factors affect the development of an individual's parameter32,81. Our study challenges this notion by offering concrete evidence that the development of an individual's time preference is subject to environmental influences, and thereby opening new avenues for understanding the dynamics of intertemporal decision-making.
Our second interpretation explores the cognitive impact of resource scarcity. Limited resources may overload cognitive capacity, diverting attention from long-term planning and precipitating poor financial decisions, such as impulsive purchasing and mismanagement of finances82,83. The third interpretation emphasizes the role of social trust. Lack of trust and reliability in receiving promised future rewards may logically drive individuals to prefer immediate gratification84,85.
These three interpretations, though seemingly distinct, converge in real-world contexts where socioeconomically disadvantaged families often face both resource scarcity and reduced social trust86. This synthesis forms the basis of the ‘behavioral poverty trap’, wherein individuals raised in impoverished environments are prone to overvalue immediate rewards, leading to myopic behaviors such as overconsumption, inadequate savings30,82, and heightened risk of psychiatric disorders including psychosis and addiction34,54. These behaviors, in turn, perpetuate socioeconomic challenges and hinder escape from poverty33,87.
We build on this behavioral poverty trap framework by identifying the potential causal influence of neighborhood environment on intertemporal choice, leveraging longitudinal observations of preadolescent children aged 9–12 years, a critical period for neurocognitive development. A plausible biological mechanism for this phenomenon is the effects of glucocorticoid on brain’s reward system. Prior studies indicate that adverse social environments induce chronic stress to children, elevating glucocorticoid hormones like cortisol88–92. In particular, neighborhood socioeconomic deprivation has a more pronounced association with cortisol increases in children compared to any other social environmental factors93. Long-term chronic stress from growing up in disadvantaged neighborhoods could result in epigenetic modifications affecting the mesocorticolimbic dopaminergic system, thereby altering the reward system91,92. This alteration may lead to a heightened preference for immediate rewards and impulsive behaviors, such as unhealthy eating and substance abuse90–92,94−98, further entrenching the cycle of socioeconomic disadvantage.
Our second findings extend this understanding by linking the heterogeneous effects of ADI on children’s PLEs with the intricate relationship between childhood social adversity and the reward system. Our findings suggest that these differential effects of neighborhood socioeconomic adversity are modulated by genetic predispositions and neurodevelopmental traits associated with delay discounting. Children who experience residential deprivation and are at a higher PLEs demonstrate several distinct characteristics, including lower BMI, younger parental age, and altered brain structures and functions associated with delay discounting. Notably, these children showed reduced volume or white matter in specific brain regions (right temporal pole, right parahippocampal gyrus, right caudate nucleus, right isthmus cingulate), along with a smaller intracranial and total grey matter volume. Functionally, these children showed greater activation during MID tasks in regions including the right posterior cingulate, right ventral diencephalon, right insula, left precentral gyrus, left thalamus proper, and left superior temporal. This is particularly pronounced in children with a greater propensity for hallucinatory symptoms, who also show increased activity in the left supramarginal gyrus.
It appears that variations in structural and functional aspects of the limbic system (the posterior cingulate, ventral diencephalon, insula, temporal pole, parahippocampal gyrus, and isthmus cingulate) play a crucial role in how socioeconomic hardship affects PLEs. This individual variability may be linked to individual differences in the glucocorticoid and reward system. The interaction between our genes and neurons, in response to chronic stress from poor socioeconomic conditions, may determine the differing impacts of such adversity on PLEs.
Although direct testing of this association within the ABCD Study samples was not feasible due to lack of relevant data, extensive animal and human corroborate our hypotheses. These studies suggest that maladaptive valuation of intertemporal rewards, namely the excessive discounting of future rewards, is linked to dysfunction of the prefrontal-limbic system, associated with psychopathologies such as psychosis in adolescents and adults34,35,38–41,99. Animal models have demonstrated that adverse social environments trigger chronic dysregulation of glucocorticoid signaling in the hypothalamic-pituitary-adrenal axis and the dopaminergic mesocortical circuit92, through epigenetic control91,92. This dysregulation disrupts the adolescent reward circuit. In humans, childhood exposure to social adversity leads to changes in the hypothalamic-pituitary-adrenal axis and contributes to psychosis through abnormal neurodevelopment of the limbic regions, the temporal pole, cingulate cortices, parahippocampal gyrus, and caudate nucleus100–103. Young adults with a history of childhood social deprivation often show impaired reward processing, particularly in the cingulate and mesostriatal dopaminergic system25,103–105.
The age of our study’s participants, 9–12 years old, is a critical period for development of the prefrontal-limbic system103,106,107. Children with psychotic disorders often exhibit greater reductions in grey matter compared to their healthy peers108,109. These neurodevelopmental alterations are associated with increased neuronal excitation, reduced inhibitory neural activities, and the resultant impulsive behaviors110. In line with our findings, previous research has shown a correlation between higher PLEs and neuroanatomical alterations in the right temporal fusiform, right temporal pole, and right parahippocampal gyrus102, as well as greater neural activations in limbic regions such as the insula and cingulate cortices during reward outcomes in MID task111. Overall, our findings on the heterogeneous effects of neighborhood deprivation contribute to the growing body of literature showing the role of glucocorticoid and reward systems in modulating the adverse effects of environmental deprivation on psychosis101,103,105,112,113.
In our study, we discovered that children, when exposed to deprived neighborhoods and already facing the challenges of residential disadvantage, were more likely to experience PLEs. Surprisingly, these children also showed a higher GPS for cognitive performance. At first glance, this finding seems to contradict prior research, which has consistently identified a negative relationship between PLEs and cognitive performance28,114.
To understand this complex relationship, we turned to the bioecological model and the Scarr-Rowe hypothesis on gene-environment interactions115–117. This theory proposes that the impact of genetic factors is lessened in unfavorable environments. An easy way to visualize this is by comparing it to plant growth: in poor soil, a plant can't get the nutrients it needs, which limits its growth despite its genetic potential to grow tall118. But, when these children face residential disadvantages, this protective gene-psychosis link weakens. Their genetic resilience decreases, making them more vulnerable to the negative impacts of such disadvantages on PLEs. Essentially, those with higher cognitive ability GPS lose more of their potential genetic protection, making them more susceptible to the adverse effects of their environment on PLEs.
Consistent with our findings, recent large-scale studies have demonstrated that the impact of genetics on brain structure, cognitive functions, and mental health disorders becomes less significant in harmful environments (e.g., abuse)119,120. Conversely, in more supportive and enriched settings, like those associated with higher socioeconomic status, genetic influences are more noticeable (e.g., high socioeconomic status)116,121,122. Together with these findings, our study contributes to a deeper understanding of how genetic and environmental factors interact to influence the development of psychopathology in children.
In this study, we utilized innovative causal machine learning techniques to test the negative impacts of neighborhood deprivation on childhood psychopathology. Specifically, we employed the IV Forest method that allows us to discern how residential deprivation influences children’s PLEs in a manner dependent on a variety of genetic risk factors (e.g., GPS of cognitive performance, educational attainment, and IQ114,123,124) and environmental risk factors (e.g., family income3,125), as identified in existing literature. Our findings were adjusted to account for potential biases from both observed and unobserved variables.
The machine learning algorithm we used was adept at modelling the complex interplay gene-environment interactions. Among the three IV Forest models we tested (i.e., Delay Discounting, Gene-Brain, Integrated), only the Integrated model—which included delay discounting, sociodemographic characteristics, and genetic and neural correlates of delay discounting—identified the significant heterogeneous effects of ADI on children’s PLEs. This suggests that the intricate interactions among environmental, genetic, neural factors, and delay discounting play a crucial role in how socioeconomic adversity impacts PLEs.
In contrast, traditional linear mediation analysis, which relies on predefined interaction terms in a deductive statistical framework, failed to identify any significant mediation effect of delay discounting between neighborhood deprivation and PLEs. This underscores the effectiveness of our advanced causal machine learning approach over conventional methods in detecting the subtle effects of various interacting factors on childhood psychopathology.
The IV Forest model represents a significant advancement over traditional analysis methods by enabling data-driven feature selection and the stratification of heterogeneous treatment effects59,60. Unlike methods that rely on patterns predetermined by researchers, the IV Forest model inductively identifies complex and nonlinear interactions, providing a deeper and more nuanced understanding of the data. Traditional deductive approaches often suffer from low statistical power and bias61,126, which inadequately capture the complexity of gene-environment interactions57,58. For instance, employing conventional linear regression to model interactions among the 45 covariates in our Integrated model would necessitate the inclusion of over 35 trillion interaction terms. This is not only impractical due to its complexity but also prone to issues like reduced statistical power, poor interpretability, and collinearity.
Given these challenges, we believe that causal modeling approaches that assess heterogeneous treatment effects based on machine learning hold significant potential as powerful tools for advancing precision science in psychology and medicine. These approaches provide a more dynamic and accurate framework for understanding the multifaceted influences on psychopathology, demonstrating significant promise for future research in these fields.
Several limitations of this study warrant consideration. Firstly, we used ABCD Study, a non-randomized, observational cohort. Despite employing IV methods, including IV Forest and DoubleML, to adjust for both observed and potential unobserved confounders, the inherent limitation of the exclusion restriction assumption persists. This assumption, critical to the validity of the IV methods, cannot be directly verified with data. Albeit we substantiated this assumption with extensive prior research discussed in the Methods section, its validity may still be subject to scrutiny, as might the overall efficacy of the IV method in fully adjusting for residual confounding bias. To mitigate this, we calculated E-values for the average treatment effects of neighborhood disadvantage on delay discounting and PLEs. The large E-values calculated indicate that it would require unobserved confounders with a significantly strong association with both the exposure and the outcomes to negate our findings. Given the magnitude of these E-values and our comprehensive adjustments for confounding, it is unlikely that unobserved confounding could fully account for the observed relationships, thereby supporting the potential causal interpretations, despite not providing absolute proof of causality.
Secondly, since the majority of participants identified their race/ethnicity as white (63.76%, similar to the US population), the generalizability of our findings to other minor race/ethnicity might remain to be tested. Nonetheless, recent research suggests that temporal discounting measures are consistent across diverse populations worldwide (61 countries, N = 13,629)127, which may mitigate concerns regarding the representativeness of our findings. Thirdly, the relatively short follow-up periods in our study (1-year and 2-year follow-up) may not adequately capture the long-term neurodevelopmental processes underlying intertemporal valuation and related psychopathology. Notably, additional follow-up data from the ABCD Study became available after we finalized this manuscript. As the ABCD Study continues to collect more longitudinal observations, longer follow-up periods in future studies could yield deeper insights. Fourthly, despite efforts to ensure representativeness by recruiting from diverse school systems across 21 research sites in the United States, our sample does not fully mirror the entire US population128. To address this, we provide a supplementary table (Supplementary Table 1) comparing the demographic characteristics of our final sample with the general United States population enhancing the relevance and generalizability of our results. Lastly, future research should examine the heterogeneous effects of additional environmental risk factors—such as parenting behavior28 and early life stress120—as primary exposures to elucidate their potential causal effects on psychiatric disorders. Investigating how genetic and neural correlates interact with these risk factors will also advance our understanding of their unique contributions to individual differences in psychopathology.
This study highlights the differential effects of neighborhood disadvantage on intertemporal economic decisions and PLEs during early childhood. It underscores the importance of identifying diverse treatment effects by integrating genetic and environmental factors to guide personalized healthcare approaches. Furthermore, we propose that enhancing the childhood environment could contribute to the reduction of economic and health inequality gaps. Economic policies promoting positive intertemporal choice (e.g., increased savings, healthy diet) have predominantly focused on paternalistic welfare policies in adulthood. These policies often assume that an individual’s tendency to discount future rewards is fixed (“exogenous”)32. However, our findings suggest that policies or interventions aimed at enhancing the socioeconomic environment during childhood may foster improved intertemporal choice behavior, thereby reducing economic33 and health inequality23,129. By addressing the root of the problem, this indirect approach may assist individuals in developing the capacity to make more informed choices, ultimately promoting better outcomes.
The insights gleaned from our novel analytical methods revive longstanding philosophical inquiries: do humans possess reason or free will independent of their environment? If our ability to act responsibly is indeed shaped by external circumstances, this challenges the traditional rationale for penalizing criminal and morally objectionable behavior based on the assumption of free will. This inquiry underscores the need for further interdisciplinary research, bridging insights from psychology, sociology, neuroscience, ethics, and law, to explore the nuanced relationship between individual agency and environmental influences. Such research is crucial for understanding how external factors impact decision-making and behavior, thereby informing more nuanced approaches to ethical and legal accountability. It invites a reevaluation of responsibility and justice, suggesting that effective interventions and policies must consider the complex interplay of individual predispositions and environmental conditions in shaping behavior.