Why You Should Always Know and Use Base Rates

As we approach the 2024 US election, we are sharing several posts that we hope will help improve how you think about politics. Last month we explained what Overton Windows are and why they are important. This month we explain why you should always know and use base rates. We will begin with a thought experiment:

Is This Person a Trucker or Librarian?

Imagine you are at a fancy fundraiser for a charity and are introduced to a young man. He is wearing a tweed sweater and nice slacks. You learn that he grew up in the Northeast, attended a nice prep school, and earned a degree from an Ivy League College. He explains to the group that he works full-time but is also currently writing his first historical fiction book. He is very well-read and offers to host a future fund-raiser in the large library and study area of his house.

As you both wait in line for a drink, you ask the man where he works. He answers:

1. As a librarian at an Ivy League College,
2. As a truck driver.

What is your guess? ¹

Why Are Base Rates Important?

The key to answering the question above is to consider both the specific information available and the base rate (general prevalence) before making a judgment. The specific information from the paragraph above all points to the young man being a librarian at an Ivy League College.

Now examine the base rates for Ivy League librarians and truckers.

• More than 3.5 million people work as truck drivers in the US (90% are men)
• There are 8 Ivy League Schools, with an estimated 200 total librarians employed at these schools

In other words, there are about 18,000 truckers for every single Ivy League librarian! Despite the specific information shared, it is much more likely that you are talking to a well-educated trucker than an Ivy League librarian.

What is Base Rate Fallacy?

Humans often fall prey to the base rate fallacy. This is the tendency to overemphasize specific information and neglect the base rate when making probability judgments. Here is another example:

A news report claims a new blood test can identify people with a rare disease with 99% accuracy. Sounds impressive, right? But what if the disease only affects 1 in 100,000 people (the base rate)? Even with a 99% accuracy, the test would likely produce many false positives (people who test positive but don’t actually have the disease). This is all because the base rate is so low.

Why You Should Always Know and Use Base Rates

Understanding base rates helps you make better-informed decisions. It encourages you to consider the overall context and general prevalence, not just isolated information. This can be valuable in fields like medicine, finance, and everyday life when evaluating the likelihood of something happening.

I have observed many leaders and smart people fall prey to the base rate fallacy. So, the next time you look up your ailment on “WebMD” and see that it might be cancer, be sure to look at the base rates for that type of cancer first!

Now let’s apply this thinking to US politics…

How Different Are Republicans and Democrats?

I recently read the book, Undue Hate by Daniel Stone. Professor Stone is a friend and behavioral economist who examines reasons for the current hostile polarization in US politics.

Stone notes that some of the causes of affective polarization are the normal culprits:

• The reduction of unbiased news and increase in news with an ideological viewpoint (FoxNews, the New York Post, and InfoWars on the right and MSNBC, CNN, and the New York Times skewed to the left)
• Social media (and especially posts and comments) becoming “trusted” news sources
• Confirmation bias from getting most of your news from your preferred (partisan) news source and likely even more partisan online contacts.

Stone also references Pew Research Center survey data that examines differences between the two major political parties. As the title of the study notes, “Most say their party – but not the other – respects democratic institutions, governs honestly, and respects different types of people.”

How Different Are Republicans and Democrats, Really?

Stone notes that most Republicans and Democrats actually have very similar values. He points to survey data from moreincommon.com that shows base rates for the differences between Democrats, Republicans, and Independents. While most people expect the opposite party to have lower (worse) values, people from all three groups have nearly the same core values and will make very similar decisions in situations involving helping a stranger, donating to charity, or lending a hand to a neighbor.

In other words, while a Democrat is going to think their Republican neighbor who votes for Donald Trump has much different (worse) values and isn’t as good a person, the two people will make identical choices in many areas of their lives. And vice-versa.²

Summary

There are two takeaways from this post.

1. Always try to research and understand base rates before you make a decision or prediction as the correct decision is likely to follow the base rates. Otherwise, our biases about the specific information we observe will lead to a worse decision.
2. Base rates (through research studies and surveys) show that the values held by Democrats, Republicans, and Independents are similar. Remember this the next time you are in a discussion with someone of the opposite party and be curious, not judgmental. By doing this, you may both learn and grow.

Please share your questions and comments below.

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¹ I could not identify the book or author who is my source for this thought experiment so have paraphrased much of it.

² For another study on the values held by the two major US parties read The Righteous Mind by Jonathan Haidt.