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Rotman Insights Hub | University of Toronto - Rotman School of Management

Gut check: how to make sense of data

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Sam Maglio

How has the daily presentation of data by experts affected our risk-taking behaviour?

All of our actions and behaviour are driven by us doing what we think is the right thing. It is interesting how people use data to inform what they think is the right thing. In a pandemic — when there is all manner of different data floating around — there are many important questions around how our leaders communicate data in a way that is true to the factual state of the world, while also being sensitive to the psychological processes involved in making sense of that data.

Think about infections and case counts as water filling up a bathtub. Every moment, more water is entering the tub, and at the same time, the bathtub is getting fuller. The water that is constantly entering the tub is the flow, and the overall volume of water is the stock. In terms of the pandemic, people either wanted to know the overall stock of cases or the day-to-day fluctuations or flow.

In our research, my colleagues and I found that people see the pandemic as more or less risky depending on whether case counts are presented as flows or stock. Exposure to the stock count makes people see the pandemic as more serious, making them less willing to engage in behaviours that seem risky, like dining indoors at a restaurant.

What role do factors such as age, political affiliation or medical history play in our assessment of risk?

Our individual differences change how we see the world, and in a pandemic, a few important individual differences pop out. If I have a pre-existing medical condition or if I’m especially old, that leads me to perceive more risk in the world. And that is beneficial, because it will motivate me to be more cautious. People’s judgments of risk consist of two elements: what the experts tell them about the average citizen mixed with how they selectively incorporate things that are unique to them into the equation.

We found that in the U.S., people who are more right leaning in their politics see less risk than their more liberal counterparts, and that perception of risk drives them to be more open to engaging in behaviours that might make them more susceptible to that risk. They are more willing to dine indoors at a restaurant, get back to the gym or send their kids to school.

However, we also found that no one was unmovable. By talking about stock (the total number of cases), audiences believed the virus was riskier than they would otherwise, and that motivated protective behaviour. So theoretically, you could make young people or right-wing people see more risk and move the needle a bit and make them a bit more hesitant to, for example, send their kids back to school.

As of press time [late January], daily case counts in Ontario are trending downward even as cumulative case counts continue to rise. What is the smartest way to present such data?

I think where communicators have really faltered is in being inconsistent. I’ll go back to the stock and flow analogy as a clear illustration. There is no neutral way to present this data, but that doesn’t mean we can’t offer our audiences both the stock and the flow — or at least put a toggle button on the web page so they can see one presentation format versus the other. That would help a lot with clear messaging. It is important for leaders to give clear directives, but at the same time, to be transparent about where their conclusion is coming from. If they come back with a different message the next day, it won’t be because their political motivations changed, it will be because new information has come out. That is what good science does: it updates its conclusions in light of new statistics.

How might we become more discerning consumers of data, pandemic and otherwise?

I have two pieces of advice. First, know and trust your communicators, and be aware of how their biases might be creeping in. How you present information can change the conclusions that people draw, and it seems naive to think that communicators are not aware of that. So if communicators are making a decision on how they present data, and they have at least an intuition that how they present it can change conclusions, then we as consumers of that communication must be aware of how their presentational biases might change our thinking.

Second, take some agency for yourself. Just because stock and flow might be the most prominent means of data communication, it does not mean they are the most important pieces of information for you. In my decision to send my daughter back to school, I thought, "well, there is a pretty good chance she could contract COVID-19 because she is too young to get vaccinated and she is around lots of other kids, but I’m almost positive that, if she does, nothing bad will happen. And on the slim chance that something bad does happen, how do the hospitals look?" That is the individually tailored question that I, personally, want an answer to.

Your research focused on the two most prominent methods of communicating COVID-19 data: new confirmed cases and the total number of confirmed cases. Are there other metrics we should heed when making judgments about risk?

When I talk to people, many of them tell me that it doesn’t seem like a matter of if but when they will catch COVID. When people start talking like this, the data in which they are interested becomes very different. The recovery rate is a key stat at this point, because once you get individually tailored enough in your data, the best you can do is to look at base rates. If I want to know, "what is the chance of severe illness and hospitalization for someone in my age category with my medical history given that I am vaccinated and boosted," the odds are pretty low. So, think of yourself as a factual statistic and your perception of risk will become a lot more objective.

Talk a bit about the role emotions play in decision-making processes.

It would be wrong to think that we could ever take emotions out of decision processes all together. Take something as simple as making a purchase: should you buy this or that pack of gum? You could scrutinize this for the rest of your life. At a certain point, your emotion has to kick in and say, let’s make this decision. Which one do I feel better about given what I know to be true? For certain types of decisions, relying on our emotion and asking ourselves, "how do I feel about these options?" rather than scrutinizing all the different pros and cons makes for not just a more enjoyable decision process — but it can also leave us more satisfied with what we choose.

You argue that for certain types of decisions, it may be optimal to focus on our feelings in arriving at a choice. Under what circumstances is it better to trust one’s gut?

I would encourage people to rely on their intuitive gut feeling for choices where they run the risk of overthinking. I like to use the example of The Cheesecake Factory restaurant, where they hand you a book and call it a menu. You could sit there reading that thing until your next meal. At a certain point, too much deliberation will keep you from the thing that you want, which is a plate of food in front of you to quell your hunger. Such a gigantic choice base also makes you less satisfied with what you choose because with every option on the menu, you are going to think, geez, I ordered the pasta, but maybe I should have gotten the pizza.

The more we deliberate, the more we are aware of the trade-offs inherent in our decisions. This can be good or bad, depending on the type of decision we are making. If you just want to have some pasta in front of you and not live in a world of regret for the rest of the meal, feelings are the way to go.

Do you believe emotions played a role in people’s decision not to be vaccinated (for non-medical reasons)?

I look at outcomes like the fervor, the zeal and the extent to which people have been vocal about this, and I play psychological detective. I say, ‘I don’t know for sure how you made your choice in arriving at this opinion, but the way you are lauding it sure makes it look like you reached this place based on your intuitive gut feeling.’

In a research project with Taly Reich from Yale, we looked at what people think about their feelings, and what is interesting is they seem to come from somewhere deep within us, even though we aren’t sure where. People like to think that somewhere within them is the person they were meant to be — the best version of themselves, the person they would be if only so many obnoxious constraints didn’t get in the way. This version of us is called the true self.

Taly and I asked people to make choices — nothing as elaborate as being pro- or anti-vaccination, just choosing between different options in a hypothetical scenario. We either asked them to make the choice based on deliberate rational analysis or based on their intuitive gut feeling. Then, we asked, To what extent does your choice reflect your true self? We found that when they made a choice based on gut feeling, people said, ‘yeah, that’s me.’ Those who relied on feelings were more confident in their choice, and more willing to share their choice with others. There was nothing involved here as drastic as trying to stage a rally, but if you chose a restaurant based on your feelings, you were more likely to recommend that restaurant to friends.

Our key takeaway was that there is a connection between relying on feelings that seem good, real and authentic, and being more staunch in our commitment — and more willing to try to persuade others to get on board. These days, whenever I see political extremity in any form or an inability to listen to the other side, it sounds to me like a case of reliance on feelings gone too far.

This article first appeared in the Spring 2022 issue of Rotman Management magazine. Published in January, May and September, each issue features thought-provoking insights and problem-solving tools from leading global researchers and management practitioners. Subscribe Today.

sam maglioSam Maglio is an associate professor of marketing and psychology at the University of Toronto Scarborough, with a cross-appointment to the marketing area at the Rotman School of Management.