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Decomposing Pulchritude’s Perks

I think some of my work depends on advances in some pretty cutting edge economics–assessing things like the value of conditions leading to sponstaneous creation, the long-term utility of a “creative commons,” or the costs of positional competition in search engine results. Therefore, I’m always happy to see a particularly creative use of economic analysis–as in a recent article called Why Beauty Matters published in The American Economic Review.

As recounted here, the authors note that “numerous studies have found that workers of above- average beauty earn 5 to 15 percent more than those with below-average looks.” They attempt to figure out whether this earnings edge is actually attributable to appearance, or if skills associated with beauty are the things really driving the premium. Given recent stories on “overweight-phobia” and the height disadvantge, it’s a timely inquiry.

The authors performed an experiment, asking subjects to “solve mazes” (to determine their productivity), and then asking them to “apply” for a job using one of three methods–by resume, phone, or in person. Their results were interesting:

Beautiful workers “earned” wages 12 to 17 percent higher than their ordinary-looking coworkers, Mobius and Rosenblat found, even though their maze-solving productivity was no greater. There was no beauty premium when employers saw résumés only, but there was a 12 to 13 percent wage increase when they used photographs, phone calls, or both. In the case of face-to-face interviews, the beauty premium was 17 percent.

The authors boiled down the results as follows:

The visual stereotype, that more attractive people are more productive, accounted for 40 percent of the beauty premium. Attractive workers also displayed greater confidence, by giving higher estimates of their predicted productivity, a channel producing 20 percent of the beauty gap. The most surprising result, however, was that “beautiful people perform better even in telephone conversations, where their beauty isn’t obvious,” says Mobius. The oral stereotype, by which the conversational skills of attractive workers suggest capability sight unseen, accounted for the entire remaining 40 percent of the beauty premium.

Given this account of the experiment, I don’t know if I trust the generalizability of results like these. Rather than think that beauty “shone through” the voice, I’d think communication skills would be an independent determinant of success in the negotiations. Nevertheless, I look forward to reading the full results in order to get a better sense of how economists value attributes that are not directly bought and sold on the market. And it’s especially important here, as beauty is big business.