Michael Luca: We’re Now in the Era of Data-Driven Lives

From a Wall Street Journal review by Michael Luca headlined “Two Books on the Data-Driven Mind”:

Fueled by the rise of online platforms and newly digitized records, an empirical revolution is shedding new light on everything from school choice and careers to dating and marriage. Rankings and ratings abound, and alongside them, data-driven self-help books seeking to translate social-science research into actionable insights. We have entered the era of the data-driven life.

In “Don’t Trust Your Gut,” Seth Stephens-Davidowitz argues that you can use underappreciated empirical patterns to—as the ambitious subtitle says—“get what you really want in life.” The book serves up facts and at times controversial advice on areas such as your appearance, relationships, parenting decisions, occupational choice and net worth.

Regarding appearance, Mr. Stephens-Davidowitz, a former quantitative analyst at Google, suggests a “three-step plan tolearn what makes you most attractive.” First, download an app that uses artificial intelligence to adjust your “hairstyle, hair color, facial hair, glasses, and smile.” Second, post pictures of yourself with these different looks on market-research websites and ask people to rate them. Third, see which look makes you most appealing to the survey respondents. This process led the author to grow a beard; he concludes that “just about anyone could benefit from a less extreme version of this analysis.”

On dating, he tells us that if you try to “be an extreme version of yourself,” then “some people will find you extremely attractive.” His rationale? Research shows that people are more likely to click on extreme profiles. He also suggests looking for partners who are “conventionally less attractive,” since they will be “dramatically less competed over in dating, even though the evidence suggests they are just as capable of making a partner happy.” Also: “Ask out a lot of people.”

“Don’t Trust Your Gut” offers advice for parents who want to raise their children to become elite athletes. Unsurprisingly, the author suggests that you should skip basketball—unless you think your kids will be extremely tall. Instead, try equestrianism, where “even someone who isn’t given unusual genetic gifts might have a shot at rising in the sport.”

While data can be an asset in our decision-making, there are important limitations to the life proposed in “Don’t Trust Your Gut.” Aspiring to a data-driven life risks leading us to focus too narrowly on what can be measured, rather than what matters. Is market-testing your appearance really the path to fulfillment? Should you really take a Moneyball approach to dating, or view potential life partners as market opportunities? In a world in which we are drowning in data, what’s really needed is more wisdom. We need the judgment to interpret data, and sound principles for navigating life.

Enter “Wild Problems: A Guide to the Decisions That Define Us,” Russ Roberts’s book on life’s big decisions, such as“whether to marry, who to marry, whether to have children, what career path to follow.” Mr. Roberts, the president of Shalem College in Jerusalem, cautions against the seductive allure of overly narrow cost-benefit analyses, and makes a full-throated defense of taking a more careful look at your life’s goals. If Mr. Stephens-Davidowitz is aiming to provide cheat codes to win the game of life, Mr. Roberts is urging us to think more about what winning means. He tells us that we should aspire to live life with “integrity, virtue, purpose, meaning, dignity, and autonomy—aspects of life that are not just difficult to quantify but that you might put front and center, regardless of the cost.”

This isn’t an argument against data; it’s an argument in favor of thinking carefully about our goals, and a warning that data need to be interpreted carefully. While Mr. Stephens-Davidowitz leans heavily on happiness surveys, Mr. Roberts notes that “surveys asking people about their level of happiness may not apply to you, your tastes, your passions, and most important, who you become over time.”He stops short of offering a recipe for life satisfaction; instead he suggests “putting your principles above the day-to-day costs and benefits” of decisions. Having heuristics that guide your decisions is a way to commit to doing the things you believe in, and allows you to skip the cost-benefit analysis.

Mr. Roberts correctly points to the value of experimentation.“Try stuff. Stop doing the stuff that isn’t for you. Embrace the opportunities that make your heart sing.” In this regard, Mr. Stephens-Davidowitz strikes a similar chord, telling us, “if you take many shots, you have many chances.” The NFL coach Bill Belichick, Mr. Roberts reminds us, is “famous for his eagerness to trade a draft pick from an earlier round for multiple draft picks in later rounds,” allowing the team more room for exploration. Artists who show at different galleries are more likely to catch a break relative to those who repeatedly show at the same gallery.

Mr. Roberts’s argument more broadly echoes a growing sentiment in psychology and economics: We are more than pleasure-seeking algorithms. We care about others and about our own identity. And we care about meaning. Mr. Roberts views these not as mistakes, but as ideals. He wants us to “focus on being part of something larger” than ourselves, and being “part of an ensemble rather than the main character” of our life story.

In the end, the core messages offered by the two authors are complements, not substitutes, and there is merit to both. We don’t think nearly as much about data as we should. Whether starting an exercise routine, choosing a school or buying a house, we should be more reflective about what the data tells us. Psychology research has documented the systematic mistakes we make when overrelying on our intuition. Data can help. But to take advantage of data, we need to know what we value and what we are pursuing. We need to understand the limits of a data-driven life.

Michael Luca is an associate professor of business administration at Harvard Business School and the co-author of “The Power of Experiments: Decision-Making in a Data-Driven World.”

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