Today, I spoke to James Hamilton, who is the Charles S. Sydnor Professor of Public Policy, and Professor of Economics and Political Science at Duke University. He is also the coauthor of You Are What You Choose. In this interview, James talks about what shapes our decisions, explains how decision making impacts marketing campaigns, and goes over a lot of the research in his new book.
What are the six core traits that shape every decision?
When you make choices you face decisions about whether to focus on today or tomorrow, on the possibility of a bad outcome, and on the spillovers that your decisions could have on others. You need to decide whether you’re going to gather a lot of information, look to others for guidance, or simply go with what you’ve always done before. In You Are What You Choose, Scott de Marchi and I show that a person approaches decision making in the same way across many different areas of life. We call the way that people make decisions their TRAITS, an acronym for Time, Risk, Altruism, Information, meToo, and Stickiness. In our research, we use decisions people make every day to measure their decision-making approaches.
We capture a person’s preferences about Time by looking at whether they’re willing to take actions today that bring benefits tomorrow, like going to the dentist or working out. We measure a taste for Risk by studying whether a person gambles, smokes, drives fast, or plays risky sports. We measure Altruism in part by whether people give blood, donate to charity, and believe in jury duty. People score high on our Information measure by buying more books, consulting more sources for financial information, and searching out news on the web and cable. Rating whether a person is high on meToo depends on the degree they look to the brand and product decisions of others and are part of a large network of friends. A person’s Stickiness rating depends on factors such as the number of cars they considered when shopping, how many fast food or casual dining restaurants they go to, and the number of different cuisines they eat.
Using information on 30,000 survey respondents gathered by the Knowledge Networks firm, we’re able to study how you can use the TRAITS to predict how people shop, drive, invest, and vote.
What is the most fascinating part of your research that you came across?
Before Scott and I did our research, I thought that people’s decision to live a green lifestyle would be heavily influenced by whether they were Democrats or Republicans. It turns out, however, that the TRAITS have a great deal of power in predicting who is likely to be driving a Prius. We find that people who shop and drive green are folks who score high on our Time measure. They think about the future in their daily lives, and this translates into concern about the planet’s future. They are high on our Altruism measure. They show up at the blood drive, and they recycle. They love Information, and living the green lifestyle in part involves gathering data and learning about choices.
Why is the gambler always a gambler?
People who are high on Risk are easy to spot. They may smoke, drink, and be more likely to be speeding on the road. This taste for rolling the dice in life also translates into other areas. Even after you take into account a person’s age, gender, education, and income, if they score higher on our risk measure they’re more likely to be invested in stocks and more likely to be trading those stocks. People high on risk are willing to experiment with new ideas, which also translates into being early adopters in product markets and being political independents in elections.
How does learning how we make decisions impact marketing campaigns?
Knowing a person’s TRAITS gives you insight into how you should frame marketing appeals to that person. If you’re selling a car, for example, you can talk about safety if the person is low on Risk, about environmental impact if the person is high on altruism, and about performance stats and quality ratings if the person is high on Information. Realizing that the TRAITS span different types of choices can also open up how you think about what groups to target. If you have a high tech product targeted at people in their thirties, you might be looking for people who like risks, enjoy information, don’t look to the decisions of others for status or acceptance, and are much less likely to stick with previous decisions. If you add in a dose of Altruism, this describes political independents. So you might want to target political independents in your search for early adopters.
Can you relate any of your research to personal branding?
“Part of developing a personal brand is knowing who you are and how you make choices.”
Before you can convey your skills to employers, for example, you need to analyze what your strengths are. If you’re interesting in learning more about how you make choices, you can go to our website youchoosebook.com and take our TRAITS test. You can even share the results now on Facebook, so that your friends can see your style of decision making.
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James Hamilton is Charles S. Sydnor Professor of Public Policy, and Professor of Economics and Political Science at Duke University. With a PhD in Economics from Harvard, he has done prize-winning interdisciplinary research about the environment and media policy. His last two books about the media (Channeling Violence: The Economic Market for Violent Television Programming and All the News That’s Fit to Sell: How the Market Transforms Information into News) both won academic awards for best media book of the year. For his overall work in the environment and media policy, he received the David Kershaw Award from the Association for Public Policy Analysis and Management, an award given every two years to a researcher under 40 who has made distinguished contributions to policy research. His latest book is called You Are What You Choose: The Habits of Mind that Really Determine How We Make Decisions.
