Outside View (Base Rates)
The outside view is a decision-making strategy that prioritizes statistical base rates and objective data over personal impressions and anecdotal experiences. It encourages humility by acknowledging that others in similar situations have faced comparable odds, rather than assuming one's own circumstances are unique.
THE IDEA
The Outside View
The outside view is a rule for analyzing options: distrust the inside view—the glossy pictures in your head—and instead consult the base rates. These numbers might be readily available (e.g., on TripAdvisor) or may need to be cobbled together. If neither is possible, consult an expert for their estimates of the base rates.
People often fall into two camps: those who immediately buy into the idea, and those who feel dissatisfied, thinking it is dehumanizing or overly analytical. The advice to trust the numbers is motivated by humility, not geekery. The numbers represent the experience of many people like us who tried something similar. Ignoring their experience is egotistical, not brave.
The humble approach: Ask, "What can I reasonably expect to happen if I make this choice?" Once we accept the answer, we can turn our attention to fighting the odds.
The Story of Brian Zikmund-Fisher
In the Heaths’ account, an arm injury during racquetball in early 1998 led Brian Zikmund-Fisher, a 28-year-old graduate student, to seek medical attention and receive a diagnosis of myelodysplastic syndrome (MDS). His only potential cure was a bone marrow transplant, which had a 25% chance of not surviving the year. He faced a brutal choice: refuse the transplant with an estimated five years to live, or take the risk of a cure or death within a year.
Brian sought base rates from journal articles but wondered if they applied to him (most patients were older). He consulted a hematologist friend, who advised him to take the averages seriously but adjust upward due to his youth. She also suggested he consider hospital volume—places doing 300 transplants per year rather than 30. He pressed doctors for hard numbers on side effects.
He and his wife also sought stories from other transplant patients via a Listserv. They learned practical details, such as needing a third adult for child care. Brian trained physically to prepare. After finding a donor, he had the transplant at Fred Hutchinson Cancer Research Center. The recovery was tough, but he survived and had become a professor by the time of the account. He used both base rates and textured information to make his decision.
Key Lessons
- Base rates are crucial but do not make the choice easy. Emotion can play a role in finalizing a decision.
- Seeking stories can provide practical insights that base rates miss.
- Ask experts for outcomes in comparable cases, and distinguish that evidence from their forecast for one individual.
- The outside view is not the whole story; it can be complemented by close-up information.
When to use it
Choosing a medical treatment: Look at survival rates and complication rates from large studies rather than relying on a single success story from a friend.
Making a career change: Research the average success rates and typical outcomes for people in that field, rather than trusting your own optimism.
Investing: Consider historical market returns and probabilities (base rates) rather than acting on a hot tip or recent news.
Evaluating a business opportunity: Study the failure rates of similar ventures and the factors that differentiate successful ones, instead of focusing on your unique idea.
FROM THEORY TO EVERYDAY LIFE
In practice
Brian Zikmund-Fisher's Bone Marrow Transplant Decision
Brian, a 28-year-old with MDS, needed to decide between a risky transplant (25% mortality in one year) or an estimated remaining life of five years. He gathered base rates from studies and an expert, adjusting for his age and choosing a high-volume hospital. He also learned from patient stories (e.g., needing a third adult). His wife's comment about their daughter's memories helped seal his decision. The book reports that he survived the transplant.
A MOMENT TO REFLECT
Put it to work.
Think of a major decision you made recently. Did you rely more on personal anecdotes or on statistical data? How might taking the outside view have changed your decision?
What base rates are relevant to a current challenge you are facing? How can you find or estimate them?
In what situations might the outside view be misleading, and how could you adjust for that?
Often confused with
CONTINUE THE CONVERSATION
Source texts
- Decisive How to Make Better Choices in Life and Work (Chip Heath)