Outside First Forecasting - jmadison222/knowledge GitHub Wiki
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Estimate from the top down.
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Look at the big picture first, generalizing it to your current situation.
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Then use the specifics to adapt your generalization as needed.
The Renzettis live in a small house at 84 Chestnut Avenue. Frank Renzetti is forty-four and works as a bookkeeper for a moving company. Mary Renzetti is thirty-five and works part-time at a day care. They have one child, Tommy, who is five. Frank’s widowed mother, Camila, also lives with the family.
My question: How likely is it that the Renzettis have a pet?
To answer that, most people would zero in on the family’s details. "Renzetti is an Italian name," someone might think. "So are 'Frank' and 'Camila.' That may mean Frank grew up with lots of brothers and sisters, but he’s only got one child. He probably wants to have a big family but he can’t afford it. So it would make sense that he compensated a little by getting a pet." Someone else might think, "People get pets for kids and the Renzettis only have one child, and Tommy isn’t old enough to take care of a pet. So it seems unlikely." This sort of storytelling can be very compelling, particularly when the available details are much richer than what I’ve provided here.
But superforecasters wouldn’t bother with any of that, at least not at first. The first thing they would do is find out what percentage of American households own a pet.
Statisticians call that the base rate—how common something is within a broader class. Daniel Kahneman has a much more evocative visual term for it. He calls it the "outside view"—in contrast to the "inside view," which is the specifics of the particular case. A few minutes with Google tells me about 62% of American households own pets. That’s the outside view here. Starting with the outside view means I will start by estimating that there is a 62% chance the Renzettis have a pet. Then I will turn to the inside view—all those details about the Renzettis—and use them to adjust that initial 62% up or down.
The rationale section above is taken from the following book:
