In a matter of months, I will head off to college. One of the things I've been thinking about recently is how students pick a major -- I'm certain as to mine -- and in particular, I've been asking myself to what extent people think rationally when they are choosing a major.
I don't think they really do. In fact, I think it's almost impossible for such a choice to be made rationally, i.e. there are tremendously strong forces driving such irrationality.
(I find behavioral economics fascinating -- Daniel Kahneman's Thinking Fast and Slow is on my summer reading list, and it should be on yours too -- but for whatever reason I don't write about it too often. This post will begin to rectify that oversight.)
This matters, because whether you regard the major selections of college students as rational or irrational should determine whether you do or do not sympathize with them when they, immediately after graduation, complain about low pay or scarce opportunities for remunerative work, as was discussed in this recent New York Times feature. (The whole thing is excellent reading, in fact.)
If you regard the choice of major as a rational decision-making process, then it stands to reason that all fresh graduates from art programs were and are in full knowledge of what side of the tradeoff they are on when it comes to the probability distribution of lifetime incomes. Therefore, when they complain that they can find no work which values their degree, you shouldn't sympathize with them -- they understood in advance the likelihood of this happening, they should have been prepared, they had other options.
If you regard the choice of major as a irrational decision-making process, then it stands to reason that the newly-minted artists weren't in full knowledge of the tradeoffs -- they didn't recognize or correctly appraise the tradeoffs they faced. Therefore, when they complain that, hey, there's no good work out there for an artist, then there is room for sympathy. In fact, I would argue there could very well be room for a public policy intervention; the state should try to encourage ("nudge") more rational decisions. Or, if that proves impossible, one might argue that such graduates have a valid moral claim for income support from the state. It's not that one would want to encourage such choices, but given that the trade-offs are not understood, changing them doesn't change behavior -- and there are analogous situations in which we forgive or otherwise lessen the consequences of bad decisions given the irrational circumstances.
Consider the U.S. criminal justice system. In most states, murder is considered in "degrees" of reprehensibility. The penalty for first-degree murder -- those which are "willful and premeditated" -- is far more severe, possibly even death, than second- or third-degree murders -- those which are not willful or premeditated, and those which are committed in a "heat of passion...[that would] cause a reasonable person to become emotionally or mentally disturbed," respectively. The reason we lessen the punishment isn't because someone killed in cold blood is any less dead than someone killed in a "heat of passion." It's because juries make an informed judgment about the capacity of the murderer to make a rational decision under his or her circumstances.
I'm not going to argue, for the rest of this post, that artists, English majors, etc. have a valid claim to state aid. Rather, I want to think about if these choices are irrational, and if they are, why these individuals may be making irrational choices.
Regret is the telltale sign of a decision-maker understanding post hoc that his or her decision was irrational. And we see a lot of regret in the New York Times article:
“As an 18-year-old, it sounded like a good fit to me, and the school really sold it...I knew a private school would cost a lot of money. But when I graduate, I’m going to owe like $900 a month. No one told me that.”There's even more in the associated video.
When you consider the forces acting on college students, it's hard to see how a rational decision of major could even be made, even when they sit down to think about it.
First, the fact is that they are considering utility gains well into the future as compared to present utility -- let's face it, math and science requires more work than English and art -- and this invites a common force of cognitive bias, present-biased preferences.
Second, this cognitive bias is magnified by a very big framing problem. When you go to college, your "frame" -- the cultural influences under which you make a decision -- is shaped by who you are taking classes with, the professors teaching you, the school environment in general...everything that, in a rational decision-making process, should be irrelevant. What is relevant is how you calculate future utility according to a tradeoff about income, and your "frame" doesn't include this, or underweights it because of the college environment.
The framing problem is exacerbated by the fact that your frame of reference shifts dramatically between college and the "real world" -- what matters, and how you value it, changes. This makes your utility calculations incorrect. In fact, because this future life is so hard to imagine, that inability to imagine may even be the underlying force causing people to undervalue future utility. This could be an amazing study: read people a short news story about a tragedy abroad -- say, a famine in Africa -- and ask them to donate a certain amount from $10 you give them there. Then, with another group, show them a color photo which depicts exactly what is described in the text and ask them to donate; with another group, show them a video which provides the same information as the text or photo. (This is my take on an old theory of Adam Smith from the Theory of Moral Sentiments.)
My prediction is that where D = average donations, Dvideo > Dphoto > Dtext. That would be solid evidence that "imagination matters " when it comes to framing and cognitive bias.