How to Make Tough Decisions with Economist Emily Oster

[MUSIC PLAYING] SARAH BALDWIN: From the Watson Institute at Brown University, this is Trending Globally. I'm Sarah Baldwin. Before the pandemic, Watson economist Emily Oster was best known for her books, Expecting Better and Crib Sheet. They offered data-driven advice on questions about pregnancy and raising young children, and they've become required reading for many young parents.

Her knack for synthesizing data into plain language advice made her a natural fit for her next role as one of the unofficial guiding voices behind school reopening plans in America this past year. The pandemic, and Emily's role in it, have added special valence to her newest book. It's called The Family Firm, A Data-driven Guide to Better Decision Making in the Early School Years. While it might sound like a direct sequel to her other books, it actually takes the ideas in a new direction, and that's largely because, as Emily puts it--

EMILY OSTER: As your kids age, the choices that you're making, the questions that you have, the things that you worry about are really different across parents. And so that was kind of the source of, Sarah, this book, which rather than being a sort of linear run through some period of life, it's more about, here's how to think about the big picture. Here is how to think about decision making.

SARAH BALDWIN: Her goal this time around isn't just to make sense of the data, it's to help readers learn how to make decisions they can feel good about even when they don't have all the data, which, as we've learned these past two years, is often.

We also talked about what it's been like guiding so many people through challenging pandemic-related decisions and why her advice found its way so often into national headlines.

EMILY OSTER: How hard that public messaging is, but also how little we have invested in doing a good job of it, has been sort of consistently amazing. I feel like I feel a little bit of a void there, but there's kind of a limit, obviously.

SARAH BALDWIN: We started, though, by talking about her recent book and how it's less of a sequel to her other books than a spin-off. Here's Emily.

EMILY OSTER: When Crib Sheet first came out, which is now 2 and 1/2 years ago, I kind of had this feeling of like, I've written these two books. Crib Sheet was such a natural extension of Expecting Better that we kind of ended in the delivery room and then we started in the delivery room, and it sort of moved linearly through the data on those early periods of life. And it felt-- I felt like I was able to capture a lot of the big decisions that families were making and parents were making in those years. And so that sort of felt like, OK, I did that and it was like these things fit together.

And it was much more difficult for me to see, at the time, kind of the linear extension to the next phase. So if I sort of thought about it like, OK, what's the third book, there wasn't as much of a way to say, well, we stopped the three, let's start at three, because when you start to get into older kids, we don't all have the same questions.

And, you know, we don't all have the same questions at the beginning either. But there are so many more shared experiences. And as your kids age and they age into themselves, the choices that you're making, the questions that you have, the things that you worry about are really different across parents. And I realized that there was also a role for putting down more explicitly some of the ideas of decision processes that I had thought about in the context of the first books but hadn't really ever written down all in one place and articulated.

And so that was kind of the source of this book, which rather than being a linear run through some period of life, it's more about, here's how to think about the big picture. Here is how to think about decision making. And then, by the way, here's some data that you might plug into your decisions but is actually mostly on its own not that useful. It's only kind of useful when you're framing it in the space of some decision that you need to make.

SARAH BALDWIN: Can you unpack that, why data is maybe less clear cut in questions related to school, and sleep, and nutrition, and why it's not enough to look at studies. Why aren't the data helpful on their own?

EMILY OSTER: I think the data are helpful sometimes. One issue very closely related to this question of heterogeneity. So when you are faced with a situation in which people are really different, one of the implications of that is the way they will respond to stimulus. The way they will respond to any given treatment is potentially very different.

So we sort of find ourselves in a situation in which we're trying to figure out, like what's the effect of charter schools on kids? Well, there's not just like one answer to that question. There is an answer, potentially, on average for kids for whom this is a choice that they make, we can say something about that. But it's not the case that we could say that it's the same for every kid or we could be sure about what the effect is for our kid.

And so for example, when we think about something like charter schools, kind of dive into that data about, are charter schools better for test score outcomes, say, than traditional public schools? The evidence is varied. Basically, in places in which the traditional sort of neighborhood public schools are not very good on this test score dimension, charter schools tend to deliver better outcomes. In places where the neighborhood public schools are better, charter schools tend to deliver slightly worse outcomes or equal outcomes.

And that means that you can't just look at one study or even the average effect of charter schools and say that would be somehow relevant for your particular situation. So I think that's kind of the biggest challenge with the plug and play data approach, of saying, I'm going to look at this data and then I'm going to use that data as a sole basis for my decision, when the data is rarely about your kid or when you want to pick pieces of it that are about your family, but not all of them.

SARAH BALDWIN: So in this book, which you call a business book, or you compare it to a business book, you sort of conceptualize the family unit, admitting that can take any form, as a firm, and you advocate having a mission statement to start with and each member of the family being able to sort of express priorities. Why is that important, because I never thought of a family as a company, but when you write about it, it starts to make sense.

EMILY OSTER: Yeah, I think the sort of idea of the family as a firm is, in some ways, a little tongue in cheek. But I think that a lot of what I'm suggesting people do is that they take the kind of deliberate approach to this set of choices, or this experience that they are more commonly taking at their job, and then, in particular, recognizing the need to write things down and kind of be-- almost to be explicit about surfacing our disagreements.

I think that is some of this big picture development, is to say when we are developing a mission statement, or what are our top priorities, or doing those kind of things in some business type exercise, the reason that we have people write things down and the reason that we try to be explicit is so we can all be on the same page about what are the things we really care about.

I think there's kind of a sense of like, like of course we're not always going to agree about it, but that's OK. We're going to-- we'll talk about it, and we'll decide what are the things that are most important? And we'll debate. And we anticipate disagreements, and we think that that is part of the business decision making process.

I think part of what makes this hard to do in families and a little like weird is that people have this sort of instinct, like well, we love each other. Of course we agree on our mission. Of course we agree on our priorities. We're a family. I want my family to be-- I don't want my family to have to operate in this corporate way. But the thing is, you don't always agree on the priorities or you may not always agree on priorities.

I think that there is a lot of value to this sort of writing of things down and to surfacing disagreements if they are there, in a moment where we have planned to have the disagreement also, or plan to have it have a discussion. Because I think in families sometimes what happens is some of these differences and priorities sort of manifest in a more kind of immediate gut reaction kind of way, and that kind of conflict is more challenging than the kind of conflict that you have planned to do so.

So that's a lot of this idea in the mission statement, and in the big picture, and the logistics, and the sort of talking through what you want your family life to look like, that it will hopefully lead to a place where you're happier with what you get to.

SARAH BALDWIN: And then after you've done that, you talk about what you call the four F's, like basically your suggested approach to decision making in the family context. And I wonder if you could talk to us about that?

EMILY OSTER: So I developed this to sort of think about how we can structure decisions when we have a big decision, so not like what should we have for lunch or what should we do on Saturday but questions like, what school should my kid go to? What choices should I make about child care? What should they do in sort of large-scale extracurricular kinds of choices, so big choices?

And I have this structure I call the four F's, because it's like a business book. You've got to have the four-- the something. Everything starts with the same letter. So the first one is, frame the question, so recognizing that when we are making a choice it is not very helpful to say, should we do this or not, if we haven't said what or not is. And so much of the first step is just to say, can you outline two concrete choices? Should our kid go to this school or this other school?

Second step is to fact find, and that is to gather evidence. Some of the evidence may be from data. Some of the evidence may be from studies. And I talk a lot about different pieces of that in the second part of the book. But some of that evidence gathering is also more, I would say, logistical, so thinking about, if we make this particular choice, what is that going to mean in terms of what our schedule will look like? You know, who's going to drive?

So much of this period of life is logistics. So who's going to do the carpool to school? Who's going to take the kids to soccer practice, if that's what we're talking about, so really kind of getting together all the information that you need, all the things about your values and about, just like what are all the considerations that should go in this decision and sort of bringing them all together in one place, one concrete place.

Third step is what I call final decision, so to say we're going to, rather than allowing this choice to kind of fester and fester and just keep thinking about it and talking about it all the time, thinking about in the shower, we're going to plan a time to make the choice. So we're going to plan a time. We're going to say this is a point at which we'll have all the information we need. We'll have a meeting, or whatever it is, and we'll sit down and we'll make the decision, and we'll try to then move on, so giving the decision the time that it deserves, if it's a big decision, but not all the time, not to just let it go on forever.

And the fourth step is follow up, so recognizing that in many of these choices, although we can sometimes treat them as if like once we have made the choice, we cannot make any other choices, that in fact, we usually do have the opportunity to follow up and think about our choices again, and that we should not only have that opportunity, but we should plan for it.

We should have a time that we're going to sit down and we're going to make a later decision. We're going to think carefully about whether we made the right choice in the first place and whether we want to keep going.

SARAH BALDWIN: And you mean meetings literally, right? Like, how young were your kids when they started coming to these meetings?

EMILY OSTER: Well, you can't always include kids in the meetings. Kind of depends. You want to be careful. You don't want to give your kids-- there's a sort of balance between giving your kids some engagement with the decisions, particularly those that engage them-- that involve them, rather-- and letting them think that they have more control than they do.

But I think our first real meeting with Penelope was probably like the start of third grade, where we kind of like sat down to talk about, in that case, some aspect of the daily schedule. So it wasn't like a decision-making meeting. It was more like, let's review what we're planning to do every day and what things look like. And we had an agenda.

SARAH BALDWIN: That's great. I love that. So can you think of an example, or could you share an example of a decision that you've decided to overturn or to revisit?

EMILY OSTER: Yes, there are many of these. I mean, I think there were-- so we had sort of had my older kid in soccer. It was, at the time we were doing it, like a fairly mild amount of soccer, and the thing is that she hated it. And we had sort of decided that it was important for her to do some external sport, that basically that was like doing something that was active and outside, and involved sports was something, not that we needed her to be especially good at it, which was fortunate because of her performance in the soccer, but just that this was something that we thought was a value, so we had enrolled her in this.

And then in situations like that, there is an opportunity, an obvious time opportunity to follow up and to say, OK, we did this last year. Do we want to do it again this year? And we revisited that at some point. And her view was she definitely did not want to do it. But I think my husband was a little sad, which sometimes happens in these things, where it feels, in the follow up, like, well, are you saying that you hate-- like you hated it? We had-- he used to take her, and so it was like we had these nice times together. And now you're saying that you didn't like them.

And I think there is that inevitable, I don't know if we think about it as cognitive dissonance, or some kind of regret, or some cost fallacy, or there's some way in which you feel bad about saying you've done the thing wrong. But if everybody doesn't like it or there is some better alternative, then there is a need to follow up, even if you don't feel good about it. So in the end, we spent a bunch of time talking about this, and we told her she had to run instead. That was the compromise.

SARAH BALDWIN: I wonder, is there-- in your experience, has there ever been value to sort of throwing the four F's to the wind, like just going with your gut?

EMILY OSTER: I mean, I think that there is a-- like of course there are situations in which your gut should matter. And there are small decisions where it's not important and so there's really no reason that you need to spend a lot of time. I mean, our time is constrained if you engage in an elaborate four-step decision process for like literally everything you're doing, then you will never do anything. And so I think that that's the downside there.

But I think that there-- with these big decisions, there's rarely the case that just going on your whim is likely to be a good approach and, in fact, not so much because the decisions that you come to will be different, but because your level of confidence in the decisions will be different. If you make a decision about your kid in this time, you make a choice for them, most of the time there will be moments when you're like, ah, was that the right choice?

And if you-- the way you made that choice was like, just one day you got tired of thinking about it and you were like, oh whatever, let's just do this thing. Then when you second guess it, you don't have the confidence to go back and be like, no, I made this thoughtfully. And you're just like, yeah, I guess I am second guessing it, because I just decided it kind of for no reason, because I was frustrated. And I think that that is, in some ways, the sort of thing that I hope is delivered by being more deliberate here, is this confidence that at least you made the choice the right way.

SARAH BALDWIN: I wonder if there's anything unrelated to parenting that you think could use this Emily Oster treatment, kind of this very deliberate decision making process.

EMILY OSTER: Like, the thing that comes to mind always for me is job choice. So at some point, I was writing about this kind of framework in the context of COVID. And I ended up doing a video with somebody. And the guy who was doing the videography was listening to me explain this. And he was like, oh, I've been trying to decide whether I should change jobs for the last six years. I've just been going around, and around, and around on it. And this sounds like maybe if I were thinking about it more like this, if I were planning to decide, that would be really helpful.

And so I think on some of those kinds of life decisions, not something like should I get married to this person, where hopefully you're making the decision for other reasons, but some of these career kinds of choices, I do think that this kind of framework might be helpful.

SARAH BALDWIN: This kind of relentless decision making in parenting seems very modern to me. And I wonder, is it that we actually, in fact-- some of us-- do have more choices and, therefore, it's harder? Or is it that we are aware of more choices, or do we have more data? Like why wasn't parenting like this a generation ago?

EMILY OSTER: I think some of it is about the kind of pre-professionalization or like activity glut of modern parenting. So actually a lot of the sort of thing I'm reacting to, the thing the book is reacting to, is the idea that you can sort of find yourself in a situation that you didn't want because you have agreed to do many different things. And you have sort of somehow built up and built up and built up into some life that's like totally way crazier than you had anticipated.

I think that has become more common in this era in which we are sort of, at least for some set of parents, kind of thinking about pushing our kids to do various things, or kind of trying to optimize our kids in some way, or make them the best. And so I think that experience, which has left many parents feeling both behind and also harried, is some of the argument for deliberation here, is to say, hey, rather than say yes to every activity on the margin, you're going to think about which activities you want to do. And I think that is a reaction to this parenting experience, glut that we're having.

SARAH BALDWIN: I want to talk a little bit about this past year and a half. Reading your book, I thought so much about all the decisions we were all making and the role you played, helping so many people with those decisions, specifically with regard to COVID-19 and how to have correct behaviors around that. So what did you learn-- what was your takeaway from your time as the COVID czar?

EMILY OSTER: I mean, there are probably many takeaways. I have been consistently very disappointed at the official ability to either communicate anything or to collect any data. That was sort of like a big theme for me over the last year, was seeing private citizens in various ways fill in what seemed like obvious jobs for the government.

I would say the other thing is that I have been amazed at how difficult we have found it to communicate complicated public health messaging and at the continued failure of that kind of communication. And I think, for me, this was sort of brought to a head like two weeks ago, where I thought, we've been doing-- we've been in this for 18 months. For 18 months, we've been thinking about how we communicate risk to people, how we talk about what they should do and what they shouldn't do, how we explain the results of data and what we're learning from data.

And then 18 months into that, the CDC bungled this rollout of new mask mandate in such an extreme way, like to a point where the people that I interact with on a regular basis, all of whom are spending all of their time thinking about COVID and reading studies about COVID, just couldn't figure out even like what was going on, basically. And this is-- it's not like-- I cannot imagine what people who are not like deeply steeped in COVID were thinking with these messaging.

And so I think, for me, that kind of-- how hard that public messaging is, but also how little we have invested in doing a good job of it has been sort of consistently amazing. And I feel like-- I feel a little bit of a void there. But there's a limit, obviously.

SARAH BALDWIN: You just answered my next question, which was, have you seen a change since the new administration?

EMILY OSTER: So I-- yeah. So I think, just to give them credit, I think I have seen a change since the new administration has come in, in the sense that they are trying to do a good job. Like, they are trying to get out good messaging that respects the seriousness of the disease and that respects our desire to kind of balance life with the economy. And they're not like scientating COVID denier. They're trying. They're trying to do a better job. But I think it's hard.

SARAH BALDWIN: What do you make of that? Is it more incompetence, or is it risk aversion? Why this far in, with so much negative press, as it were, why aren't government officials getting better at this?

EMILY OSTER: I mean, I think part of the issue in a school case is-- and I think I hadn't fully appreciated this until this year or even the last few months-- is the incredible decentralization of the school system in the US. So you sort of say, like how can it be that we don't have any idea how many kids are in school or that there are states where the state says, like I can't tell you whether the districts in my state had in-person learning or not last year.

Like there are states in the US where they just have no idea. They don't know who was in person, who was not in person. Maybe they have some sense, but like they don't have anything systematic on that. And certainly the federal government doesn't have that. So that's striking, but it is what it is. And it's part of what makes it hard to figure out.

SARAH BALDWIN: Well, given that it's clearly-- these questions aren't going away, and the pandemic isn't going away. Are you going to stay as involved as you've been in the conversation?

EMILY OSTER: So let me say two things. So one is, I think I've kind of done two things in the last year, one is served some role to help individual parents make decisions in the face of uncertainty in ways that are kind of drawn some from the books and just some from kind of general discussion. I think that role, I hope to continue to play. I hope that it will become increasingly not about COVID, but we'll have to see. But that is a role that I play well and I think has been helpful and I would not want to in some ways abandon.

Then there's this separate role, of kind of like policy and speaking to what should the policy be-- should schools be open as a policy, as distinct from the question of, should my kid go to school, given the choices that we face? And I'm interested in continuing to comment on, should my kid go to school? What choice should I make as a parent? But I think that I am not as interested in continuing to be involved in questions like, should schools be open? Because I feel like, at this point, like first of all, there's some more general agreement on that now. And second of all, I think that should now be the job for policymakers.

SARAH BALDWIN: I think you you've said and written that you did not expect to write another book after Crib Sheet, but clearly you're going to write a book about the middle school years, right?

EMILY OSTER: [LAUGHS] I don't know. My daughter-- I talked to my daughter about this the other day. She was like, are you going to write another book? I was like, I don't know. What do you think? And she was like, well, I think you have to wait till we're teenagers before you write anything about that. And so I have a few years. I don't know.

It's a-- I feel like I said a lot of things in a lot of the big picture thoughts I have from having worked in this whole space for a number of years, kind of made it into this book. And so, I'm not so naive as to rule out a fourth book, but we'll see.

SARAH BALDWIN: Well, we'll look forward to reading that. But in the meantime, thank you so much for this one. And Thanks for coming in to talk about it today.

EMILY OSTER: Thanks for having me.

SARAH BALDWIN: This episode of Trending Globally was produced by Dan Richards and Alina Coleman. Our theme music is by Henry Bloomfield, additional music by the Blue Dot Sessions. You can learn more about all of Watson's podcasts on our website. We'll put a link to that, too. We'll be back in two weeks with another episode of Trending Globally. Thanks for listening.

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