Considering a Big Change? Go for It, Says Evidence From 20,000 Coin Flips
Steven Levitt, an economist and the co-author of Freakonomics, studied what happened when people made major life decisions based on random chance.
Steven Levitt, the University of Chicago economist who co-authored the bookFreakonomics: The Hidden Side of Everything, says he’s long been fascinated by the social pressure against quitting, whether that means quitting a project, a job, or a marriage. “Behavioral biases tend to push the idea of not quitting, because you get the pain up front but the benefits down the road,” Levitt says.
So he was excited, he says, to do a “very different kind” of research project, one that infiltrates people’s everyday lives and examines what is most important to them. Most academic research is based on a government’s or a company’s data, or is carried out in a controlled lab environment. More recently, field experiments have started exploring decision-making in real life, though they tend to focus on low-stakes choices, such as whether or not to buy a certain product or donate money to a certain charity. But Levitt wanted to know about life’s bigger dilemmas, like debating whether or not to have a child, which is something people don’t generally ponder in a controlled setting.
To set up such an experiment, the results of which were recently published in a National Bureau of Economic Research working paper, Levitt enlisted the help of his Freakonomics fans (the book has been spun out into a website and a podcast), asking them to visit a website created for the project, without telling anyone exactly what he was studying. He also found participants via Reddit. The most Levitt told subjects was that his project involved research about how people make decisions about important events. He asked people who were on the fence about something to flip a virtual coin on the website. If someone got heads, the site instructed them to go ahead and make a change. If they got tails, it meant keep the status quo.
Participants could choose from a menu of dilemmas, such as deciding whether to open a business, or could input their own. The most common life decision people were pondering? Whether to quit their jobs. Another large number of people couldn’t decide whether to break up with their partner. To make sure participants were truly undecided, they answered a series of questions that would help them arrive at a decision. If they still couldn’t make up their mind, they were instructed to flip a virtual coin. Over the course of a year, Levitt’s subjects flipped more than 20,000 virtual coins.
Levitt then followed up by email twice with each person: two months after tossing the coin, and then six months after tossing the coin. Levitt found that those who had made a major change, like filing for divorce or leaving their jobs, were more likely to report being happier two months later, and even happier six months later, Levitt says. This was true whether they had made the change based on the coin toss or of their own volition. For those who made trivial decisions, such as whether to begin a diet or grow a beard, the coin toss didn’t seem to much matter: They were just as happy whichever path they took.
The results fit Levitt’s theory that people who are uncertain about whether to uproot their lives probably should. “As a basic rule of thumb, I believe that people are too cautious when it comes to making a change,” he says, adding that he is certainly not encouraging happily married people to split up.
The study does have a few weaknesses. First, Levitt couldn’t observe the people he was studying, so he had no way to verify the truthfulness of their answers. (In some cases, people did agree to find a third party to vouch for their responses.) Also, not everyone who tossed a coin participated in the follow-up surveys to see if they ended up making changes and to report their happiness, so the data is less than complete. Finally, the participants are not necessarily representative of the general population, as a large number of them are Reddit users or Freakonomicslisteners.
When I asked Levitt if he expects his unusual study to be published in a peer-reviewed journal, he said, “I hope so.” But even if it’s not published in a journal, it will still be one of his favorite research projects. “Just because it seemed like such a long shot that we would get people to come to the website to toss a coin about something really important to them. I mean, how many economists go on Reddit to get people to participate in their research?” I couldn’t think of any. But I did wonder if that was the only thing that set this project apart: How many economists can say their research might have directly contributed to ending a marriage or bringing a new life into the world?