Cribsheet summary

At first glance, there might not seem to be much common ground between the arid academic discipline of economics and the highly personal, practical task of parenting a baby. But there is, in fact, a significant overlap between the two.

Parenting revolves around making difficult decisions, and decision-making is one of the main facets of modern economics. For example, economists ask: Given a choice between two services, how does someone decide which one to purchase?

If modern economics is correct, then there’s no single right answer when you’re making a decision that hinges upon your preferences and circumstances. But then how can you have a crib sheet for parenting?

Well, you might not be able to have all of the answers at hand when reality tests you as a parent, but you can equip yourself with a general framework for making the decisions that parenthood forces upon you. This framework can be broken down into a few steps.

When we’re applying an economist’s decision-making framework to the difficult choices that a parent needs to make, no subject seems more cut-and-dried than finances. Which option will bring more money into your bank account – going back to work, or staying at home with your baby? Some simple calculations can answer that question fairly easily.

But even here, the nature and significance of the answer are going to vary a lot depending on your circumstances and preferences, which will shape the trade-offs you’ll be making. Those trade-offs, in turn, will depend on a pair of economic concepts called opportunity cost and marginal value. Let’s illustrate these ideas through a hypothetical example.

With many parenting decisions, weighing the potential risks and advantages of one choice versus another should, in theory, be a very rational process. You would simply put the risks on one side of your mental scale and the advantages on the other side, then see which one is heavier, and voila: decision made!

In practice, however, our emotions can easily muddle our thinking. That’s because the prospect of putting our children at any risk whatsoever tends to provoke a panicked, knee-jerk reaction in our minds.

The variables of parental decision-making can be split into two columns. In the more subjective, personal column are preferences and circumstances. And then there’s the more empirical, factual column: the costs and benefits of the options that you’re choosing from.

You’d think the first group would be more nebulous, while the second side would be clearer. But in reality, things are often the other way around. Determining the actual facts about the potential risks and benefits of, say, breastfeeding can be rather difficult. And that’s not in spite of, but because of the fact that there’s a lot of scientific research floating around out there about the topic.

If you want your parental decision-making process to be evidence-based, you should review the scientific research available on the choices you’re weighing – but when you do that, you should keep in mind that not all research is of equal value. This brings us to another important part of applying economic reasoning to parental decision-making: weighing not only your choices, but also the evidence that informs those choices.

As we’ve just seen, all research is muddled by the existence of confounding variables and the possibility that there are additional variables that the researchers have simply failed to identify and adjust for. But some types of research do a better job of dealing with this problem than others.

If the gold medal for research goes to randomized controlled trials, what kind of research gets the silver?

Second place goes to the type of research that involves observational studies. To conduct such a study for breastfeeding, you’d basically just collect a bunch of data about both breastfeeding and non-breastfeeding mothers and their children, then compare the two groups and see what kind of different outcomes you find.

Finally, it’s time to give out the bronze medal for scientific research into the potential risks and benefits of certain parenting practices. Third place goes to the type of research that involves case studies.

To conduct a case-control study, you basically go out and look for children who exhibit the same outcomes or symptoms. Then you try to find out all of the things they have in common. After adjusting for confounding variables, you see what you have left, and then you try to identify a causal connection between whatever remains and the outcomes or symptoms in question.